UK accountancy firm Vantis received an
emphasis of matter paragraph in an audit opinion after the firm’s
auditor, Ernst & Young (E&Y), flagged payment
problems stemming from insolvency work on Stanford
International Bank.

Vantis was appointed joint-liquidator of
Stanford’s bank in February 2009. Despite pouring “significant
assets” into the insolvency work, the firm is struggling to
recover fees after a US court issued a freezing order and
the US-appointed receivers launched a UK
court appeal over the control of the bank’s US
assets.

In interim results to the six months to 31
October 2009, the AIM-listed Vantis posted a £10.7 million loss
compared to a £4.6 million profit a year ago.

Emphasis of matter statements highlight when
an auditor has picked up material uncertainties over a company’s
ability to trade but should not be interpreted as a death
knell.

E&Y’s emphasis of matter statement
noted:

“In forming our conclusion we have considered
the adequacy of the disclosures made in note 1 of the interim
financial information in respect of the material uncertainties
associated with receipts from the Stanford insolvency and the
various cash flow and cost reduction initiatives being undertaken,
which may cast significant doubt on the company’s ability to
continue as a going concern.

“The validity of the going concern basis
depends on the Group being able to operate within its current
banking facilities and covenants which requires the successful
outcome of the above. The financial information does not include
any adjustments that would result from failure to achieve
this.”