HIGH-PROFILE Belfast chartered accountants firm McClure Watters has been ordered to pay £60,000 to the UK’s disciplinary body for accountants and actuaries.
McClure Watters Chartered Accountants was investigated by the Accountancy and Actuarial Discipline Board (AADB) in relation to its role as auditors of the Emerging Business Trust (EBT), a publicly funded enterprise body in the North, between 1998 and 2002. The firm subsequently merged with Dublin-based Farrell Grant Sparks (FGS) in 2006.
The AADB brought formal complaints against McClure Watters and the firm’s co-founder, Rollo McClure, because its work “fell short of the standards reasonably to be expected” of a member and a member firm of the Institute of Chartered Accountants in Ireland.
The complaints related to audits of EBT’s accounts for the years ended September 30th, 1998, to September 30th, 2002, inclusive and the accounts of EBT Venture Fund Limited for the year ended September 30th, 2001.
EBT was a small business support fund set up in in 1996 and backed by £3 million from the International Fund for Ireland and £750,000 from defunct government agency LEDU.
Earlier this week a disciplinary tribunal upheld the complaints brought by the AADB in relation to the audits of the accounts of EBT and ordered that Mr McClure be fined £6,000 and be reprimanded. It also issued instructions that McClure Watters Chartered Accountants be fined £6,000 and that they pay a total of £60,000 costs to the AADB.
The disciplinary body said that Mr McClure and McClure Watters had failed to carry out audits of EBT between 1998 and 2002 with “due skill, care, diligence and expedition”. It also ruled Mr McClure had placed too much reliance on information supplied by EBT director, Teresa Townsley.
Ms Townsley’s accountancy firm, which she ran with her husband Michael, was the managing agent of the EBT’s funds.
The AADB found that the “reliance placed on the representations of Mrs Townsley as reliable evidence to support the appropriateness of the bad and doubtful debt provision was inadequate”.
The disciplinary body drew attention to Mr McClure’s failure to disclose in financial statements transactions involving the EBT venture fund and companies Mr Townsley had an involvement in.
The fund ceased trading in 2005 following an investigation by Invest Northern Ireland regarding potential conflicts of interest.
