ISoft starts inquiry into accounting problems
Click to follow
The Independent Online

ISoft has launched an investigation into "possible accounting irregularities" after its auditors Deloitte & Touche uncovered discrepancies in the health software company's previous revenue-recognition policy.

The company rushed out a statement after the market closed yesterday saying it had "received information suggesting possible accounting irregularities affecting revenue recognition under its former accounting policy in the financial year prior to and including the year 30 April 2005".

Deloitte & Touche will conduct the investigation alongside an internal team led by the current finance director Gavin James. This is likely to implicate the former chief executive and finance director Tim Whiston as well as other previous executives of the company, including the ex-chairman Patrick Cryne.

Also likely to be investigated is the resignation of the finance director John Whelan in December 2004, a few months after he took the job.

ISoft has issued a string of profits warnings in 2006 and has postponed the publication of its annual results indefinitely while it renegotiates its banking agreements and a restructuring of the NHS IT contracts.

The company used to book the full value of contracts on an upfront basis, regardless of when customers actually paid. This meant it often booked as current revenue money it would not see for several years. It abandoned this policy in June, wiping off £165m in profit from its previous accounts. Mr Whiston resigned a few days later.

Comments