Naughty Serco - accusations of Fraud

[talltim]

Looks like Serco needs to buck its internal auditing and honesty up a bit if it wants to bid for the future Northern and Merseyrail franchise renewals

The justice secretary, Chris Grayling, has called in the City of London police to investigate alleged fraud by Serco staff working on a £285m contract to transport prisoners to and from courts across London and East Anglia.

Grayling said it had "become very clear there has been a culture within parts of Serco that has been totally unacceptable".

http://www.theguardian.com/business/2013/aug/28/police-serco-alleged-fraud

 

[edwin_m]

If they are convicted, how will the accused be taken to prison?

 

[455driver]

If they are convicted, how will the accused be taken to prison?

G4S!

 

[rdeez]

G4S!

Brilliant.

 

[Xenophon PCDGS]

Looks like Serco needs to buck its internal auditing and honesty up a bit if it wants to bid for the future Northern and Merseyrail franchise renewals

Surely this question should be asked of the externally appointed auditors appointed by the company, as they have a legal responsibility to advise the company upon matters of commercial law and its adherence.

 

[michael769]

Surely this question should be asked of the externally appointed auditors appointed by the company, as they have a legal responsibility to advise the company upon matters of commercial law and its adherence.

The job of external auditors is to check that the company is complying with accountancy procedures and to report to shareholders non the compliance or otherwise of the annual accounts. They are not in the position to provide legal advice to directors firstly because as accountants they lack legal training and experience in commercial law and secondly because it would create a conflict of interest that would compromise their ability to act in the shareholders interests.

The company should look to its own legal advisers for advice on the law, that is what they are paid for after all.

 

[Xenophon PCDGS]

The job of external auditors is to check that the company is complying with accountancy procedures and to report to shareholders non the compliance or otherwise of the annual accounts. They are not in the position to provide legal advice to directors firstly because as accountants they lack legal training and experience in commercial law and secondly because it would create a conflict of interest that would compromise their ability to act in the shareholders interests.

The company should look to its own legal advisers for advice on the law, that is what they are paid for after all.

Some of the larger companies who externally audit (such as Pricewatwerhouse Coopers) do have their own internal legal departments, as they are concerned with a very wide range of aspects of commercial life.

 

[michael769]

True, but that is because The Big Four source a wide range of management services for businesses. But the fact remains that auditors perform a very specific and narrow role regulated by statute and their professional body, and as such the audit department of such bodies operates within a Chineese wall.

It is perhaps worth mentioning that PwC do not actually provide any services directly, their role is to instruct services to be provided by one of their subsidiary partners, so any legal services they arrange will almost always be provided by a different company than that from which they would provide auditors.

 

[Xenophon PCDGS]

True, but that is because The Big Four source a wide range of management services for businesses. But the fact remains that auditors perform a very specific and narrow role regulated by statute and their professional body, and as such the audit department of such bodies operates within a Chineese wall.

It is perhaps worth mentioning that PwC do not actually provide any services directly, their role is to instruct services to be provided by one of their subsidiary partners, so any legal services they arrange will almost always be provided by a different company than that from which they would provide auditors.

Specifically relating to Serco, the following act for them:-

Auditors : Deloitte LLP

Solicitors : Linklaters LLP

I think that the correct terminology is Chinese Wall...not Chineese Wall

 

[edwin_m]

Failure to comply with company operating procedures, or failure to have suitable ones in place, is perhaps more relevant to the ISO9001 quality auditors than to the financial auditors.