A leaked report published by Spanish press has revealed details of ongoing disciplinary proceedings initiated by Spain’s audit watchdog Instituto de Contabilidad y Auditoría de Cuentas (ICAC) against Deloitte’s work at bailed-out bank Bankia before its 2011 stock-market flotation.

ICAC maintains that Deloitte could have compromised the statutory auditor’s independence as it allegedly rendered non-audit services carried out by the same audit team.

According to ICAC, non-audit work represented 57% of Deloitte’s fees earned from Bankia, which included the preparation of interim consolidated financial statements as of 31 March 2011.

The Spanish watchdog, part of the Ministry of Economy, is investigating whether or not Deloitte could be found liable for professional misconduct and in the worst case have the firm’s auditor’s licence withdrawn.

In a statement Deloitte said the proceedings focus "on technical formalities" that in no case "represent a modification of the entity’s audited financial statements" and trusted the proceeding will be dismissed as the examination goes ahead.

Regarding the allegations of the firm’s lack of independence, Deloitte said it was the securities regulator Comisión Nacional del Mercado de Valores (CNMV) that asked Deloitte to perform the non-audit engagements.

Further investigation into Deloitte’s conduct is likely to take up to a year.

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