Alcatel-Lucent: Deloitte and EY risk bans from practicing in France for several months suspended

Alcatel-Lucent: Deloitte and EY risk bans from practicing in France for several months suspended
Alcatel-Lucent: Deloitte and EY risk bans from practicing in France for several months suspended

After four years of investigation and four days of hearing before the restricted formation of the audit gendarme (the sanctioning body), the general rapporteur (the one who pursues) has not changed his mind. He remains convinced that the auditors of Deloitte and EY (formerly Ernst & Young) committed “extremely serious” errors in unreservedly certifying the 2014 and 2015 accounts of Alcatel-Lucent. According to him, the work carried out by the auditors was not relevant enough to attest to the reliability of the turnover of the American subsidiary. A key indicator because it contributed 40% to the group’s total sales.

Also, Thierry Ramonatxo demanded heavy sanctions against the two firms and four partners who signed the accounts. Against Deloitte, principal auditor, and EY (ex Ernst & Young), co-auditor, he asked the restricted formation of the H3C (High Council of the Auditors) a ban on exercising for 24 months for the first and for 18 month for the second, the two sentences being accompanied by suspended on the whole. EY and Deloitte have never been convicted in France before, in the context of a disciplinary trial.

A Deloitte partner risks a 6-month ban on practice

Against associates who are natural persons, the proposed penalties range from 12 to 24 months of prohibition to exercise depending on the case, also suspended. Only a partner of Deloitte France, signatory of Alcatel’s 2014 accounts, and responsible at the time of the Deloitte network in Europe, could receive a higher penalty. It was requested against him a ban on practice for two years, including 18 months suspended, or 6 months firm.

In addition to the grievances related to the certification of Alcatel’s 2014 accounts, he is accused of having failed in his obligations of brotherhood and impartiality. This partner made “disloyal”, “discourteous” or even “rude” comments by email to other auditors, his colleagues at Deloitte France, in the United States, and even at EY. He even questioned their competence in front of the customer, in this case Alcatel. He was sanctioned by Deloitte for not having respected the code of ethics of the firm, with a call to order, but not only: his bonus for the 2018 financial year was cut by 50% (or 52,000 euros) .

The file is too old to give rise to financial penalties. Can only be pronounced reprimands, warnings, suspensions, prohibitions to practice, or finally radiation.

Contested grievances

The restricted formation of the H3C is expected to deliver its verdict on February 17. It will have to decide on a technical debate: did the auditors respect the standards of the profession? For their part, the latter contested the alleged grievances. They consider that their work was relevant to ensure the reality and the exhaustiveness of Alcatel-Lucent sales in the United States. The accounts have never been called into question. Proof of this, according to them: PwC, which certified the accounts in 2016, could not find fault with the accounts of past years. Meanwhile, the US audit regulator, who also investigated, closed the case.

 
For Latest Updates Follow us on Google News
 

PREV 25th unicorn: how French Tech smashed the goal set by Emmanuel Macron
NEXT four French soldiers injured in Burkina Faso in an explosion