Description: In what could be described as somewhat of an embarrassment, Big Four audit firm Deloitte has been fined $1.59 million by CPA Ontario, the governing body for the accounting profession in that province. Deloitte’s problem was that some employees engaged in “deliberate backdating” of audit working papers on close to 40 audits. Somehow the auditors were able to work around the software controls to backdate work to make it appear it was performed or reviewed earlier than in reality. CPA Ontario said “Backdating obscures when and what work was performed and reviewed,” creating “questions about the accuracy or timeliness of audit documentation and the quality of the audit.”

Date:  November 2, 2023

Source:  thestar.com

 Link: https://www.thestar.com/business/deloitte-fined-1-59-million-by-ontario-regulator-after-some-employees-altered-computer-clocks-to/article_561fe53c-f68b-5089-9e46-fc7f533e2d2f.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) As someone studying accounting, how might this story impact your choice of employer after graduation?

2) The story tells us Deloitte became aware of the problem in March 2018, reported it to CPA Ontario in September 2019, and reached the settlement last week. What opinion do you have on this timeline?

3) Pages 10-10 of Wiley’s Financial Accounting: Tools for Business Decision-Making mentions Deloitte in the Analytics Mindset inset box. What does this section tell us regarding Deloitte?