Auditors face Maxwell verdict today

Click to follow
The Independent Online
THE ACCOUNTANCY profession is braced for swingeing action against the world's biggest firm today, when its most senior watchdog is expected to deliver its long-awaited report on Coopers & Lybrand's role as auditor of the late Robert Maxwell's business empire.

Coopers, now part of PricewaterhouseCoopers, could be forced to pay huge fines, while the four partners who were investigated by the profession's Joint Disciplinary Scheme could be expelled from the Institute of Chartered Accountants.

Accountancy insiders expect that, if any of the parties are found guilty, the punishments will be heavy, in the interests of demonstrating to the public that the profession is determined to take tough disciplinary action if required.

One said that he understood Coopers had been subjected to a tough examination, while another said that, because the Maxwell affair and the collapse of the Bank of Credit and Commerce International were two of the biggest scandals of recent years, it was likely examples would be made.

Having given the JDS the power to levy unlimited fines, the profession has recently produced a blueprint for combining self-regulation with oversight by an independent review board. But members of the profession realise that the Government is watching developments closely and will impose statutory regulation if it is felt the existing system is not working.

The findings will come more than seven years after Robert Maxwell died, apparently after falling from his yacht in the Canary Islands. His empire of more than 400 companies - almost all of which were audited by Coopers - then collapsed, revealing a pounds 400m "black hole" of missing pension funds.

The complaints laid against Coopers by Chris Dickson, executive counsel to the JDS, concern the Maxwell pension funds, Mirror Group Newspapers and the late tycoon's private businesses. One of the complaints said: "Coopers should have considered whether there was evidence of fraud, other irregularities, defaults or unlawful acts necessitating a report to a proper authority."

Coopers and the partners involved have consistently denied any wrongdoing.

Mr Dickson concluded his investigation last summer, and a tribunal consisting of a senior QC and two accountants considered his findings later in the year.

Although the investigation has taken more than seven years to conclude, it could have been delayed still longer if Coopers had succeeded in having it postponed until the completion of a lawsuit claiming that the firm was negligent.