Accountancy watchdog bans former iSoft pair
THE accounting watchdog has banned two former top executives at Birmingham-founded health software firm iSoft for eight years over a financial reporting scandal.
Former finance director and then chief executive Tim Whiston and ex-finance director John Whelan, admitted to the Financial Reporting Council that their conduct fell significantly short of the standards expected of members of the Institue of Chartered Accountants in England and Wales.
Both men were previously cleared of criminal wrongdoing at a trial in London in 2013 after a case against them and other directors of the one time high-flying FTSE 250 company collapsed.
In the hearing brought by the FRC the pair admitted “recklessly causing or permitting iSoft” to recognise £22m of revenue from an unsigned Irish health service contract, and four other similar breaches relating to the company’s accounts. The pair also misled auditors Robson Rhodes.
Settlements between the FRC and Whiston and Whelan involved them both agreeing to be excluded from the ICAEW for a recommended period of eight years, and Whiston also agreed to pay £50,000 to help pay the institute’s costs.
iSoft was a major supplier to a multi-billion pound NHS IT contract.
It floated in 2000 and in five years its market value hit £1bn. The wheels came off in 2006 when the company issued a dramatic profit warning after discovering “accounting irregularities” affecting several previous year’s figures. Its share price nosedived and the company was bought by Australian rival IBA Health in 2007.
In 2010 the regulator issued an eight-year ban on a former iSoft financial controller who later helped blow the whistle on the accounting scandal.
The group’s auditor, RSM Robson Rhodes, now part of Grant Thornton, also faced sanction for failing to make proper checks before signing off iSoft’s financial statements. It was fined £225,000.
iSoft was originally spun out of accountancy group KPMG’s IT business in Birmingham.
It was chaired by the late Roger Dickens and former trade minister and director general of the CBI, Digby, Lord Jones of Birmingham was a director of the firm.
