One more beancounter given a spanking over Tech Data chicanery
Fined £11k and banished from Chartered Accountants facilities
A former financial controller for Tech Data faces a rap on the knuckles and the temporary exclusion from the Chartered Accountants golf club* after admitting his role in a costly number-crunching scandal.
The distributor formerly known as Computer 2000 revealed in early 2013 that it had discovered accounting errors in the UK for fiscal 2011-12 and part of 2013. Correcting these wrongs wiped out £27m in profit.
The wrongs included improper vendor accounting, the incorrect use of manual journal entries and the recognition of foreign currency exchange transactions. Combined, these practices served to overstate profits.
In October, the Financial Reporting Council fined Ernst & Young £1.8m for its "misconduct" in auditing Tech Data's book, and now the body has issued penalties to Tech Data's former beancounter Kevin Silverwood.
The Institute of Chartered Accountants in England and Wales (ICAEW) today said Silverwood had 'fessed up to six allegations that his conduct "fell significantly short of the standards reasonably to be expected of a member".
"Silverwood breached the ICAEW's Fundamental Principle of Integrity, which required him to be straightforward and honest in all professional and business relationships and not to be knowingly associated with information that he knew to be false or misleading," it added.
As a result, Tech Data's one-time financial controller will be excluded from the ICAEW for four years – reduced from five due to "mitigating factors". He is also facing an £11,250 fine, reduced from £50,000. Again, "adjusted for mitigating factors and discounted for settlement".
In May [PDF], Phil James, ex-finance director at Tech Data, was fined £100,000, reduced to £35,625 (taking into account his financial resources, and adjusted for mitigating factors), and his membership of the Association of Chartered Certified Accountants (ACCA) was rescinded for a decade.
The Financial Reporting Council said James's conduct had been "dishonest, and involved a failure to act and conduct business with integrity". He was also penalised for the "nature, extent and importance" of the standards breached. Though he was "not solely responsible", he was in a senior role, had supervisory responsibilities and tried to conceal the errors, it found. ®