Deloitte hit with £11m fine after missing £30m taxpayer fraud at UK transport giant
Big Four giant Deloitte has been fined £11m for failing to raise concerns about fraud in its statutory audits of the transport business, the Go-Ahead Group (GAG), which operates multiple train services across the UK. The Financial Reporting Council (FRC) said on Thursday the fine, which was discounted to £6.05m for early admission and co-operation, [...]
Deloitte has been fined £11 million for failing to raise concerns about fraud during its audits of Go-Ahead Group, a major UK transport company, between 2016 and 2020. The Financial Reporting Council (FRC) imposed the fine, which was discounted to £6.05 million for early admission and cooperation. The breaches involved three of Go-Ahead Group's subsidiaries - London and South Eastern Railway Ltd, London and Birmingham Railway Ltd, and Go-Ahead Bayern GmbH - which operated passenger rail services.
The FRC found that Deloitte accepted management's explanations without sufficient challenge, failing to apply "professional scepticism" and recognize that it had wrongfully retained over £30 million in taxpayer funds. Deloitte also received a severe reprimand and was ordered to prepare a report explaining the reasons for these failures.
The regulator stated that the breaches showed a highly concerning pattern of failure by Deloitte to apply sufficient scrutiny to decisions and actions by Go-Ahead Group, which put a large amount of UK taxpayers' money at risk.
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