Accountancy watchdog launches probe into Deloitte over Serco audit off back of fraud squad investigation

Hayley Kirton
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Today's investigation comes off the back of a Serious Fraud Office probe (Source: Getty)

The accountancy watchdog today launched an investigation into Deloitte over the audit of Serco Group, off the back of information uncovered by an ongoing investigation by the Serious Fraud Office (SFO).

The Financial Reporting Council (FRC) has said it will be investigating the big four firm in relation to the preparation, approval and audit of the outsourcing company's accounts for the financial years ended December 2011 and 2012.

A Deloitte spokesperson said: "Deloitte is committed to upholding the highest professional standards. We take this investigation seriously and will cooperate fully with the FRC."

Serco declined to comment.

The SFO started a criminal investigation into Serco in November 2013, alleging that the company had been billing the taxpayer for the electronic tracking of criminals who weren't actually being monitored.

An independent audit into the company revealed that some of the prisoners the company claimed to be monitoring were dead, still in prison or had never been tagged in the first place.

An SFO spokesperson said: "As part of its continuing investigation into Serco electronic monitoring contracts, the SFO has shared information with the FRC. As both investigations are ongoing, it would not be appropriate to comment further at this time."

At time of writing, shares in the company were trading down 0.4 per cent at 112.4p.