About 'our' Steinhoff auitor MAZARS: (sorry it's in Dutch)
ACCOUNTANT/auditor MAZARS :
Accountant Mazars krijgt tuchtzaak aan de broek
https://www.nextens.nl/fiscaal-nieuws/fiscale-vak/accountant-mazars-krijgt-tuchtzaak-aan-de-broek/
'Toezichthouder de Autoriteit Financiële Markten (AFM) gaat een tuchtklacht indienen tegen Mazars. De aanleiding is de geruchtmakende boekhoudfraude zaak rondom klant en branchegenoot Accon.
Accountant al eerder geschorst: De tuchtklacht van de AFM is aan het adres van Joeri Galas, accountant en partner bij Mazars. Hij controleerde de firma gedurende de afgelopen vijf jaar. Opmerkelijk genoeg kreeg de accountant eerder dit jaar al een schorsing van een maand opgelegd door de accountantskamer wegens fouten bij de controle van drankhandel Mitra. De toezichthouder heeft niet de bevoegdheden een individuele accountant aan te pakken, dat moet via een tuchtklacht'.
Translated:
Die niederländische Aufsichtsbehörde für Finanzmärkte (AFM) wird eine Disziplinarbeschwerde gegen Mazars einreichen. Grund ist der umstrittene Bilanzbetrugsfall um den Kunden- und Branchenkollegen Accon.
Zuvor suspendierter Buchhalter: Die Disziplinarbeschwerde der AFM richtet sich an Joeri Galas, Buchhalter und Partner bei Mazars. Er leitete die Firma in den letzten fünf Jahren. Bemerkenswerterweise wurde der Buchhalter bereits Anfang des Jahres von der Buchhaltungsbehörde wegen Fehlern bei der Prüfung des Mitra-Spirituosenhandels für einen Monat suspendiert. Der Vorgesetzte ist nicht befugt, gegen einen einzelnen Buchhalter vorzugehen, was durch eine Disziplinarbeschwerde erfolgen muss.
PAGE 17 : https://www.frc.org.uk/getattachment/8cf33c61-24fd-4842-b85a-e8432279cf8f/FRC- Mazars-LLP- Public-Report_July-2022.pdf
BDO and Mazars have been called out for the 'unacceptable' quality of their work by Britain's accounting watchdog.
'It follows Financial Reporting Council spot checks on audits from EY, PwC, Deloitte, KPMG - known as the Big Four - and BDO, Mazars and Grant Thornton.The FRC found the results of the inspections of BDO and Mazars audits 'remain concerning'.Only half of Mazars’ eight audits were deemed of an acceptable quality'.
'Mazars said it was very disappointed with the findings and it was committed to addressing the issues identified, and would continue to invest in and focus on applying the highest quality standards.The FRC said in its report today: 'The FRC highlighted concerns at both of these firms in the 2021 reports and these firms must therefore take further actions to improve audit quality as a matter of urgency.' The FRC said there had been 'some improvement' across the auditing sector following heavy scrutiny of failings linked to the major collapses of firms like Carillion. Sir John Thompson, the FRC's boss, said its latest report highlighted that 'consistent, long-term improvement' was still needed across the industry'.
https://www.frc.org.uk/getattachment/...P-Public-Report_July-2022.pdf
Page 15 Key findings : https://www.frc.org.uk/getattachment/8cf33c61-24fd-4842-b85a-e8432279cf8f/FRC-Mazars-LLP-Public-Report_July-2022.pdf
'We reviewed the audit of revenue on all trading audits inspected in this cycle and we continued to identify a range of issues associated with the audit of revenue. In five of the eight audits inspected, issues were identified in relation to the audit work over the occurrence, accuracy, and completeness of revenue, including three audits assessed as requiring more than limited improvements. Findings included:•On two audits, insufficient audit evidence was obtained to conclude on the appropriateness of revenue recognised. On one of these audits, this included the appropriateness of revenue recognised. On the other audit, there was insufficient evidence that recorded inventory movements reflected physical movements across revenue types including sales dispatched directly by suppliers.•On another audit, the operating effectiveness of relevant controls was not tested throughout the year, nor were transactions tested through to cash receipts or underlying source evidence beyond system generated information to confirm the occurrence and accuracy of revenue recognised. On this audit the testing of unbilled revenue was also insufficient,particularly the challenge and corroboration of the judgements made by management'.
Page 16 : 'Improve the audit of inputs and estimates in concluding on the sufficiency of provisions for expected credit losses': https://www.frc.org.uk/getattachment/8cf33c61-24fd-4842-b85a-e8432279cf8f/FRC-Mazars-LLP-Public-Report_July-2022.pdf
'We identified significant concerns with the audit’s team procedures and audit evidence in the following areas: data input testing; assessment of ECL methodology; ECL model review; significant increase in credit risk; and multiple economic scenarios'.
PAGE 17 : https://www.frc.org.uk/getattachment/...P-Public-Report_July-2022.pdf
'Findings included:•Insufficient procedures and challenge performed over the accuracy and completeness of management’s impairment assessment. •On an audit where a material uncertainty was included in the audit report, the audit team did not appropriately review or challenge management’s going concern cash flow forecasts to ensure these were reasonable to support the going concern assumption. As the audit of significant estimates and assumptions has been an area of recurring finding, the firm must, as a priority, update its audit quality plan to address our concerns in this area'.
PAGE 18 : https://www.frc.org.uk/getattachment/...P-Public-Report_July-2022.pdf
'As the audit of significant estimates and assumptions has been an area of recurring finding, the firm must, as a priority, update its audit quality plan to address our concerns in this area.
We continue to identify key findings across the audits we have inspected and on three individual audits there were multiple key findings. The firm’s review procedures, including those undertaken by the audit partner and Engagement Quality Control Reviewer,failed to identify these issues and, as a result, the quality control procedures were not sufficiently robust to prevent or detect potential material misstatements. Specifically, there were several areas where there was:•Inadequate testing of account balances across significant risk areas;•Failure to explain why the team concluded on a range of issues; and•Lack of evidence to support the audit team’s conclusions.The firm must take robust action to ensure that its quality control and engagement quality control procedures, including review by senior members of the audit engagement team and the Engagement Quality Control Reviewer, are effective'. Etc.
Page 23
https://www.frc.org.uk/getattachment/...-e8432279cf8f/FRC-Mazars-LLP- Public-Report_July-2022.pdf
'We identified the following key findings where the firm needs to:•Improve thefirm’sguidance on how to more consistently consider the perspective of an Objective Reasonable and Informed Third Party when taking decisions relating to ethics and independence, and in particular,that of non- practitioners, such as informed investors, shareholders or other stakeholders.•Enhance its policies and procedures to maintain complete and up-to-date corporate trees, especially for international groups with complex structures, to inform decisions on independence matters.Given the effective date of the Revised Standard, the majority of the audits inspected in the current year were performed under the previous Ethical Standard'.
NOTE: You will find the full report FRC about Mazars in the link above.
AS ALWAYS: STAY TUNED!
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