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By | Paul Kunert 12th May 2014 17:05

Former Tech Data UK beancounters may face rubber-glove treatment

Finances watchdog could strike off pros following $27m blunder

The Financial Reporting Council will probe the processes used by staff linked to Tech Data UK's monumental three-year financial blunder.

Blighty's largest technology distributor, previously known as Computer 2000, unearthed accountancy errors for fiscal 2011, 2012 and 2013 last spring. A subsequent internal investigation forced the firm to adjust its profits downwards for those years by $27m (£16m) after tax, and revenues by $1.59bn (£940m).

The Financial Reporting Council (FRC) is an industry body that regulates accountants, auditors and actuary professionals. It can take action if it believes one of its own deserves punishment for his or her actions.

A spokesman for the watchdog confirmed it is trying to ascertain whether some finance bods at the company "breached" its ethics rules.

"We will gather information and come to a view whether there is a case to answer, and if that is so we'll hand [our findings] to an independent tribunal," he said.

The judgment of that tribunal could result in bean-counting pros being fined, "a reprimand of some sorts or it could be that the practising accountant or auditor is struck off", the FRC man said.

He added the individuals could also be cleared of any wrongdoing.

When Tech Data UK published in February this year the findings of its own probe into the cock-up, it claimed there were inadequate controls over manual journal entries, inadequate account reconciliation processes, and inadequate anti-fraud controls and monitoring.

The distributor suspended some finance staff amid the internal investigation; some of those involved have now left the building, we're told.

The FRC can still pursue individuals who no longer work for the company, the spokesman added, as a change of employer is immaterial.

The timeframe of the investigation is not known – "how long is a piece of string," as the FRC's mouthpiece put it. He added it tries to "conclude" these things as quickly and thoroughly as possible.

Tech Data UK said it was unable to comment. ®

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