It looks like the Business model of a major News International subsidiary in the UK was corrupt.
Where were the auditors, Ernst & Young?
What did they have to say?
Or was it all 'immaterial'? It doesn't look that way now. And an auditor does have a duty to review the legal environment in which a company operates and its compliance with it.
Just a thought.....
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Unsure how an auditor can give an opinion on the legality of a company’s operations.
(a) it is not their job
(b) they are not qualified to do so, even though many accountants think they are legal practitioners (particularly in the area of tax law).
How would an auditor know that there was phone-hacking?
That’s not the issue – the auditor is required to do this
And take advice in the course of doing so if need be
Read your auditing standards
Think this is a bit of an exaggeration of an auditor’s role. I am not quite sure how you are expecting the auditor to make a statement in its audit report of alleged illegal activity when the police investigation initially cleared the company and highlighted only a ‘rogue reporter’.
Nonsense
Read this – it’s the relevant auditing standard http://www.frc.org.uk/images/uploaded/documents/ISA%20(UK%20and%20Ireland)%20250%20-%20Section%20A%20(final).pdf
So OK, maybe before a suggestion of phone hacking was made the auditor should not have looked for it
After it they were on notice – and have therefore been so for several years
In that case did E & Y look for it? If not, why not?
Any enquiry should demand their working papers.
How do you know E&Y did not delegate it to a legal professional who then cleared it?
The auditor can’t delegate responsibility.
We don’t know what E&Y did or didn’t do. That’s why we need the enquiry to look at their working papers.
I’m not sure an enquiry would have the power to force E&Y to provide them, however – and there is no way E&Y (or any other audit firm) is going to supply them voluntarily.
An interesting angle from Richard although I suspect it will be glossed over given the bungled police investigation and other details of the hacking
Interesting that the mail had the highest number re private investigator usage. They are being suspiciously quiet!
[…] I mentioned on Saturday that Ernst & Young had a role in the News International corruption debacle because of their role as auditors of the company. This has been challenged by a couple of commentators, so let me expand my case. […]
[…] I mentioned on Saturday that Ernst & Young had a role in the News International corruption debacle because of their role as auditors of the company. This has been challenged by a couple of commentators, so let me expand my case. […]