TWO former finance directors of software company iSoft have been banned from practicing as accountants almost a decade after ‘accounting irregularities’ were discovered at the NHS software supplier.
Accountancy watchdog the FRC banned Tim Whiston, iSoft’s former finance director and chief executive, and John Whelan, European FD and latterly group FD, for eight years for their part in the scandal in which the company had been booking revenues from a contract before it had been signed.
iSoft warned on its profits in 2006 after it unearthed accounting irregularities for its 2004 and 2005 accounts and admitted that its books would need to be restated.
In settlements announced by the FRC, the two directors admitted they had failed to meet the standards required of them and they had breached the “fundamental principle of integrity” required of accountants.
The FRC found that Whiston and Whelan had “recklessly caused or permitted” iSoft to recognise £22m of revenue from an unsigned contract with the Irish South Eastern Health Board in its group interim accounts for the period ended 31 October 2003, “when there was no legitimate basis for such recognition”. There were four other similar breaches relating the company’s accounts.
The FRC has already issued fines against iSoft’s former auditor RSM Robson Rhodes, a firm since taken over by Grant Thornton, and excluded iSoft’s former financial controller from the ICAEW.
Whiston and Whelan were both cleared along with a third man, Steve Graham, of criminal wrongdoing after a fraud trial into iSOFT collapsed in 2013.
As part of the FRC settlement, Whiston agreed to pay £50,000 towards the cost of the investigation.