Deloitte - Criticisms

Criticisms

Disputes involving Deloitte include:

• Adelphia Communications Corporation – The Securities and Exchange Commission announced on April 26, 2005 that Deloitte had agreed to pay $50 million to settle charges relating to Adelphia's 2000 financial statements.
• Guangdong Kelon Electrical Holdings Company Limited – Investors have claimed that there was a failure to alert them to the company's poor financial position.
• Haringey Council Refresh Project – A local government IT project in the UK, in which costs rose from £9 million to £24.6 million. Deloitte were consultants on the project, despite being employed at the same time as the council's auditors.
• Los Angeles Unified School District (LAUSD) – The firm implemented the SAP HR system for LAUSD for $95 million and because of faults in the system, some teachers were underpaid, overpaid, or not paid at all. As of December 31, 2007 LAUSD had incurred a total of $140 million in payments to Deloitte to get the system working properly. In 2008 there was some evidence that the payroll issues had started to stabilize with errors below 1% according to LAUSD's chief operating officer.
• State of California Courts System – The firm has been working on a statewide case management system which originally had a budget of around $260 million. Almost $500 million has already been spent and costs are expected to run as high as $2 billion. No single court is yet fully operational. California's Judicial Council terminated the project in 2012 citing actual deployment costs associated with the project and California's budget concerns.
• Australian Tobacco Industry – In 2011 Deloitte was commissioned by the tobacco industry to compile a report on illicit tobacco. The Australian Customs and Border Protection Service officials called the report "potentially misleading" and raised concerns about the "reliability and accuracy" of the data. When a second Deloitte report focusing on counterfeit cigarettes was released, Home Affairs Minister Brendan O'Connor described the second report as "baseless and deceptive" and "bogus. " Public health officials criticised Deloitte's decision to conduct the research, as it added credibility to the tobacco industry's effort to undermine the Government's plain cigarette packaging legislation.
• Canadian Bar Association – In September 2003, Deloitte reported to the CBA that motor vehicle accident insurance claims for bodily injury had been declining since 1999, which refuted the government's and industry's argument that general damages for soft-tissue injury had to be capped at $4,000. Within hours of release, the report was withdrawn due to pressure from the Insurance Bureau of Canada. The Institute of Chartered Accountants of Alberta found Deloitte guilty of professional misconduct and fined the firm $64,000.
• Standard Chartered Iranian Money Laundering – In August 2012, Deloitte was forced to publicly deny that as the official internal auditors for Standard Chartered, it helped the bank cover up suspected money laundering operations which were earning the bank significant profits by "intentionally ommiting critical information".
• Hewlett Packard acquisition of Autonomy - In August 2011 KPMG conducted due diligence on Hewlett Packard's $11.1 billion acquisition of the British software company Autonomy Corporation, whose accounts had previously been audited by Deloitte. In November 2012 HP announced a $8.8 billion write off due to "serious accounting improprieties" committed by Autonomy management prior to the acquisition.