It’s Completely Understandable Someone Might Sign Over 200 Audit Reports By Mistake

The LOLs just keep coming from across the pond — why doesn't the AICPA make a bigger deal out of accountants behaving badly? I'd love to see these stories front and center on the Journal of Accountancy like the ICAEW does with economia.

Today's tale of accounting gone wrong is a woman who not only performed audits she didn't need to, or didn't perform audits at all, but signed audit reports for audits she hadn't performed and chalked it all up to a big mistake. Wrap your brain around that one:

In deciding to exclude Pam Randall from ICAEW membership, a disciplinary committee tribunal (DCT) said that it was difficult to understand how she could have signed the audit reports without identifying that she was signing an audit report.

It also pointed out that she had not in fact done any of the audits she was signing the reports about. In any case, as one angry client who queried her invoice was aware, in many cases an audit was not required.

“It does not matter whether or not the 233 audit reports were sent to clients as they should never have been issued at all,” the DCT said.

“In any event, the evidence suggested they were sent to clients… Further, she appears to have charged at least certain clients for the provision of such audit reports.”

If you read that and thought it couldn't get any worse, it does.

The misconduct was exacerbated by the fact that Randall issued the 233 audit reports when there was a close family member – often her husband or her daughter – on the audited company’s board. This was in breach of Ethical Standard 2.

The tribunal also found that while her daughter, Mrs C, was a nominee director, she signed a number of the original accounts and signed amending accounts apparently without the knowledge or consent of the directors.

“In addition to being Randall’s daughter, she was office manager at PM [Randall’s sole practice], a director and a trainee accountant with the firm,” it said.

That's a little confusing. Her husband and daughter sat on that many boards? No wonder this lady got confused.

After her actions were brought to light, Randall was not very forthcoming with the ICAEW, which was probably also a mistake since they fined her £10,000 and barred her from membership for at least 5 years. Hopefully she brushes up on the definition of "mistake" before she is allowed anywhere near financial statements again.

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