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Aero FD and Deloitte set for tribunal after FRC issue formal complaint

A DISCIPLINARY formal complaint has been slapped on Deloitte and the former FD of collapsed airplane parts manufacturer Aero Inventory by The Financial Reporting Council (FRC).

The case will now be heard before an independent disciplinary tribunal at a date yet to be set.

The Executive Counsel of the accountancy profession’s watchdog made the formal complaint in connection with the conduct of Deloitte and its audit partner John Clennett in relation to the audits of the financial statements of Aero Inventory plc and its subsidiary Aero Inventory (UK) Limited for the years ended 30 June 2006, 2007 and 2008; and it also issued a formal complaint against ex-Aero Inventory FD Hugh Bevan in relation to the preparation and approval of the financial statements of Aero Inventory plc and its subsidiary Aero Inventory (UK) Limited for the years ended 30 June 2006, 2007 and 2008.

The complaint alleges that the conduct of Deloitte, Clennett and Bevan “fell significantly short of the standards reasonably to be expected of members and member firms in that they failed to act in accordance with the fundamental principles of the ICAEW’s Guide to Professional Ethics and Code of Ethics requiring them to perform their professional work with due skill, care and diligence and to act with professional competence and due care”.

An independent disciplinary tribunal will be appointed to hear the formal complaint.

In March 2011 the Accountancy and Actuarial Discipline Board, part of the Financial Reporting Council, looked into the work conducted by Deloitte auditors and members of the ICAEW that were employed at Aero Inventory.

The listed company suspended shares on the main market in October 2009 due to problems with reported inventory levels in its accounts for both 2008 and 2009.

Deloitte had refused to sign off on the 2009 accounts.

KPMG partners Jim Tucker, Richard Heis and Allan Graham, were appointed joint administrators to Aero Inventory in November 2009.

In November 2010, the administrators applied to the courts to extend the administration period by two years.

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