Jessica Fino 31 Jul 2017 11:18am

FRC launches probe into Deloitte’s audit of Mitie

The Financial Reporting Council (FRC) has announced it is investigating Deloitte’s auditing of Mitie’s financial statements

The investigation follows the discovery of “material errors” in Deloitte’s audits of Mitie’s financial statements during a review by KPMG. This led to a write down of more than £50m in profits at the troubled facilities management group.

The watchdog said on Monday that the probe was being carried out under the FRC’s audit enforcement procedure, looking at whether there have been any breaches of relevant requirements in relation to the audits of the consolidated financial statements of Mitie for the years ended 31 March 2015 and 2016.

A Deloitte spokesperson said, “Audit quality is of critical importance to our firm and we are committed to maintaining the highest professional standards.

“We take this investigation very seriously and will cooperate fully with the Financial Reporting Council.”

Last week, almost a third of shareholders at Mitie voted against the reappointment of Deloitte as auditor at the company’s annual general meeting.

Mitie said at the time that although the reappointment motion was passed, the company would be going ahead with the tender process to appoint a new auditor as planned during July, August and September 2017.

Deloitte has audited the FTSE 250 company, which employs some 52,000 people around the world, since it was first listed in 1987.