Circulations employees, including the director, misled external auditors, appointed by the Audit Bureau of Circulations, from PricewaterhouseCoopers - the same firm that Mirror Group paid pounds 400,000 to audit its 1998 accounts. Employee motivation for the scam apparently centred on maintaining the status of The Evening Mail as Britain's top-selling regional daily.
Trinity Mirror said resolving the matter through advertising-rate freezes and offering free ads could cost up to pounds 20m.
Although The Evening Mail sold 220,000 copies per day in the early 1990s, the latest audit last year put its sale at 188,000 copies, when it was 156,000 - an overstatement of 17 per cent. At The Sunday Mercury, audited circulation was 150,000, or 17 per cent above the actual sale of 124,000, while The Birmingham Post audited sale was 27,000 against an actual sale of 24,300.
Trinity Mirror management uncovered the deception on 28 September when Mark Haysom took over as managing director of the Birmingham titles. It is understood the circulations manager left within days and that the positions of several other employees are under review.
The events followed the dismissal in April of Roger Chappell, the former Birmingham unit's managing director. He was replaced by Geraldine Aitken, a former Trinity executive, who undertook an operational review.
Trinity Mirror has instructed local management to negotiate with advertisers and agencies on a case by case basis. "We're quite prepared to sit down and talk with advertisers about how we can show good faith," said the chief executive, Philip Graf.
"Obviously, it's totally reprehensible," said an executive with a media buying group. "How could this happen for so long and ABC not pick it up?"
Prem Sikka, the Essex University accounting professor, who has criticised accountancy standards, said: "I would imagine accountants have something to answer for.... Though Chinese walls are meant to be in place within firms, it is unrealistic to expect a colleague to criticise another colleague."Reuse content