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‘False accounting’ worried auditors
9:30am Thursday 21st March 2013 in News
AUDITORS raised questions about “false accounting” in Torex Retail’s financial statements, a court heard.
Nigel Horn, 58, and 42-year-old Mark Woodbridge both deny conspiracy to defraud the shareholders of the Oxfordshire-based software firm.
Woodbridge, of Mill Farm, Brookhampton, Kineton, Warwickshire, is accused of two counts of conspiracy to defraud between May 1, 2006, and January 26, 2007.
He was group financial accountant for Torex Retail and also denies three counts of false accounting in 2006, between May 1 and August 15.
Horn, of Bourton-on-the-Water, was the firm’s legal director and denies conspiracy to defraud between November 1, 2006, and January 26, 2007.
Yesterday a jury at Oxford Crown Court was told by Gibson Grenfell QC, prosecuting, that the firm requested no audit be carried out on its interim financial results in 2006.
Referring to auditing firm BDO, Mr Grenfell said: “They agreed not to do an interim review or audit, but would do enough work to convince themselves there were no issues.”
But he said BDO raised questions about discrepancies and possible “false accounting” in the limited information provided to it by Torex’s management.
Staff from the auditor discovered a total of £6.5m which “required further consideration” and they could not explain.
Mr Grenfell said the figure was “unjustifiable and false” and without it Torex would have broken its debt limit of £150m and posted an operating loss of £5,718,000.
The trial, which follows an investigation by the Serious Fraud Office, continues.