Deloitte: Difference between revisions

In 1890, Deloitte opened a branch office on [[Wall Street]] headed by Edward Adams and P.D. Griffiths as branch managers. This was Deloitte's first overseas venture. Other branches were soon opened in [[Chicago]] and [[Buenos Aires]]. In 1898 P.D. Griffiths returned from New York and became a partner in the London office.<ref name="Book1">{{cite book|title=Deloitte & Co.|date=1959|publisher=Oxford University Press}}</ref>

In 1989, Deloitte Haskins & Sells merged with Touche Ross in the US to form Deloitte & Touche. The merged firm was led jointly by [[J. Michael Cook]] and Edward A. Kangas. Led by the UK partnership, a smaller number of Deloitte Haskins & Sells member firms rejected the merger with Touche Ross and shortly thereafter merged with Coopers & Lybrand to form Coopers & Lybrand Deloitte (later to merge with Price Waterhouse to become [[PwC]]).<ref name=NYT>[https://www.nytimes.com/1989/12/05/business/deloitte-touche-merger-done.html Deloitte Touche merger done] ''[[The New York Times]]''</ref> Some member firms of Touche Ross also rejected the merger with Deloitte Haskins & Sells and merged with other firms.<ref name=NYT /> In the UK, Touche Ross merged with Spicer & Oppenheim in 1990.<ref>{{cite web|title=Spicer & Oppenheim|url=https://www.icaew.com/en/library/historical-resources/guide-to-historical-resources/firm-histories/whats-in-a-name/spicer-and-oppenheim|website=ICAEW.com}}</ref>

The ''[[Wall Street Journal]]'' reported in June 2022 that the firm might choose to divide itself into two new companies, one accounting firm and one advisory firm.<ref name=wsj_0622>{{cite news |last1=Driebusch |first1=Jean Eaglesham and Corrie |title=Deloitte Explores Splitting Auditing, Consulting Arms, Following Ernst & Young |url=https://www.wsj.com/articles/deloitte-exploring-splitting-auditing-consulting-arms-following-ernst-young-11654709024?mod=hp_lead_pos2 |access-date=8 June 2022 |work=[[The Wall Street Journal]] |date=8 June 2022}}</ref> The ''Wall Street Journal'' reported this potential change several weeks after reporting that [[Ernst & Young]] was considering a similar split.<ref name=wsj_0622/><ref>{{cite news |last1=Maurer |first1=Mark |last2=Eaglesham |first2=Jean |title=Accounting Firm EY Considers Split of Audit, Advisory Businesses |url=https://www.wsj.com/articles/accounting-firm-ey-considers-splitting-audit-and-advisory-businesses-11653592588?mod=article_inline |access-date=8 June 2022 |work=[[The Wall Street Journal]] |date=26 May 2022}}</ref>

The [[Securities and Exchange Commission]] announced on 26 April 2005 that Deloitte had agreed to pay $50 million to settle charges relating to  [[Adelphia Communications Corporation|Adelphia's]] 2000 financial statements.<ref>{{cite web|url-status=dead|url=http://www.financegates.com/news/business_news/2005-04-26/deloitte_04262005.html|title=MLS Canada – Canadian Real Estate Property Listing|website=Financegates.com|access-date=9 November 2017|archive-url=https://web.archive.org/web/20130521091731/http://www.financegates.com/news/business_news/2005-04-26/deloitte_04262005.html|archive-date=21 May 2013}}</ref><ref>{{cite web|url=https://www.sec.gov/news/press/2005-65.htm|title=SEC Charges Deloitte & Touche for Adelphia Audit|website=Sec.gov|access-date=9 November 2017}}</ref> The settlement was later reported to be as high as $210m or $167.5m.<ref>{{cite news|url=https://www.nytimes.com/2006/12/09/business/09adelphia.html|title=Deloitte and Banks to Pay $455 Million to Adelphia Investors|date=9 December 2006|newspaper=[[The New York Times]]|access-date=9 November 2017}}</ref><ref>{{cite web|url=http://ww2.cfo.com/accounting-tax/2007/08/deloitte-to-pay-167-5m-in-adelphia-case/|title=Deloitte to Pay $167.5M in Adelphia Case -|first=Sarah|last=Johnson|date=6 August 2007|website=2.cfo.com|access-date=9 November 2017|archive-date=1 January 2019|archive-url=https://web.archive.org/web/20190101134809/http://ww2.cfo.com/accounting-tax/2007/08/deloitte-to-pay-167-5m-in-adelphia-case/|url-status=dead}}</ref>

In March 2023, [[China]]'s Ministry of Finance fined Deloitte 211.9 million yuan ($30.8 million) for illegal auditing deficiencies in the audit of [[China CITIC Financial Asset Management|China Huarong Asset Management Co.]] The Ministry found that Deloitte had failed to maintain professional skepticism during the audit. Huarong was fined 800,000 yuan ($116,227) for its role in the auditing deficiencies.<ref>{{cite web |last1=White |first1=Edward |last2=Yu |first2=Sun |last3=Ho-him |first3=Chan |title=China suspends Deloitte’s Beijing office over Huarong audit ‘deficiencies’ |url=https://www.ft.com/content/9c28943f-e7ae-4b28-9e0c-3c654c2f097a |website=www.ft.com |access-date=16 June 2024 |date=17 March 2023}}</ref><ref>{{cite web |title=China fines Deloitte $31 million for auditing negligence |url=https://www.reuters.com/business/china-fines-deloitte-31-mln-auditing-negligence-2023-03-18/ |website=Reuters |access-date=16 June 2024 |date=18 March 2023}}</ref>

In proceedings arising from the insolvency of the former entertainment company [[Livent]], in April 2014 its special receiver obtained judgment against Deloitte for $84,750,000 in the [[Ontario Superior Court of Justice]], in relation to Deloitte's failure to exercise its [[duty of care]] with respect to the audit of Livent's financial statements during 1993{{endash}}1998.<ref>{{cite news|author = Drew Hasselback|title = Livent auditor Deloitte ordered to pay $84.8-million for failing detect fraud|url = http://business.financialpost.com/2014/04/06/livent-auditor-deloitte-ordered-to-pay-84-8-million-for-failing-detect-fraud/|newspaper = [[Financial Post]]|date = 6 April 2014}}, discussing {{cite CanLII|litigants=Livent Inc v Deloitte & Touche LLP|link=|year=2014|court=onsc|num=2176|pinpoint=|parallelcite=|date=4 April 2014|courtname=|juris=}}</ref> The ruling was upheld by the [[Ontario Court of Appeal]] in January 2016,<ref>{{cite news |last=Perkel |first= Colin |date=8 January 2016 |title=Court upholds $118-million award against negligent Livent auditor Deloitte |url=http://business.financialpost.com/legal-post/court-upholds-118-million-award-against-negligent-livent-auditor-deloitte |newspaper=Financial Post}}, discussing {{cite CanLII| litigants=Livent Inc v Deloitte & Touche| link=| year=2016| court=onca| num=11| date=8 January 2016}}</ref><ref>{{cite web |url=http://www.thecourt.ca/2016/01/19/livent-v-deloitte-has-the-fat-lady-finally-sung/ |title=''Livent v Deloitte'': Has The Fat Lady Finally Sung? |last1=Joseph |first1=Patricia |date=19 January 2016 |website=thecourt.ca |publisher=[[Osgoode Hall Law School]] |url-status=dead |archive-url=https://web.archive.org/web/20160125185555/http://www.thecourt.ca/2016/01/19/livent-v-deloitte-has-the-fat-lady-finally-sung/ |archive-date=25 January 2016 }}</ref><ref>{{cite news |last=Buckstein |first=Jeff |date=March 2016 |title=Livent ruling seen as game changer for auditing duties |url=http://thebottomlinenews.ca/articles/820 |url-status=dead |archive-url=https://web.archive.org/web/20160306134737/http://thebottomlinenews.ca/articles/820 |archive-date=6 March 2016 |newspaper=The Bottom Line}}</ref> but in December 2017, the [[Supreme Court of Canada]] in ''[[Deloitte & Touche v Livent Inc (Receiver of)]]'' allowed an appeal in part, declaring that liability existed only in respect of Deloitte's negligence in conducting the audit for Livent's 1997 [[fiscal year]], and accordingly reduced the amount of damages awarded to $40,425,000.<ref>{{cite CanLII|litigants=Deloitte & Touche v Livent Inc (Receiver of)|link=Deloitte & Touche v Livent Inc (Receiver of)|year=2017|court=scc|num=63|parallelcite=|date=20 December 2017}}</ref>

In September 2017, ''[[The Guardian]]'' reported that Deloitte suffered a cyberattack that breached the confidentiality of its clients and 244,000 staff, allowing the attackers to access "usernames, passwords, IP addresses, architectural diagrams for businesses and health information". Reportedly, Deloitte had stored the affected data in Microsoft's [[Microsoft Azure|Azure]] cloud hosting service, without [[two-step verification]]. The attackers were thought to possibly have had access from as early as October 2016.<ref name="guardsep2017">{{cite web|url=https://www.theguardian.com/business/2017/sep/25/deloitte-hit-by-cyber-attack-revealing-clients-secret-emails|title=Deloitte hit by cyber-attack revealing clients' secret emails|first=Nick|last=Hopkins|date=25 September 2017|access-date=10 October 2017|website=The Guardian}}</ref> [[Brian Krebs]] reported that the breach affected all of Deloitte's email and [[Superuser|administrative user]] accounts.<ref>{{cite web|url=https://krebsonsecurity.com/2017/09/source-deloitte-breach-affected-all-company-email-admin-accounts/|title=Source: Deloitte Breach Affected All Company Email, Admin Accounts – Krebs on Security|website=krebsonsecurity.com|access-date=10 October 2017}}</ref><ref>{{cite magazine|url=https://www.wired.com/story/security-news-of-the-week-deloitte-sonic-whole-foods-breach/|title=Security News This Week: The Deloitte Breach Was Worse Than We Thought|magazine=Wired|access-date=9 November 2017}}</ref> A later report by ''The Wall Street Journal'' repeated Deloitte's statement that only a few clients were affected. Deloitte said that neither its services nor its clients' businesses were disrupted. Deloitte reportedly first noticed suspicious activity in April 2017. Deloitte said that no sensitive information was compromised and that its investigators were eventually able to read every email obtained by the hackers.<ref name="WallCyber">{{cite news|last1=Rapoport|first1=Michael|title=New York Investigates Deloitte Cyberbreach|newspaper=The Wall Street Journal|date=13 October 2017}}</ref>

Deloitte had acted as internal auditor at construction and services giant [[Carillion]] before it went into liquidation in January 2018. The "excoriating" and "damning" (''[[The Guardian]]'')<ref name="Davies-16May2018">{{cite news|last1=Davies|first1=Rob|title='Recklessness, hubris and greed' – Carillion slammed by MPs|url=https://www.theguardian.com/business/2018/may/16/recklessness-hubris-and-greed-carillion-slammed-by-mps|access-date=16 May 2018|work=The Guardian|date=16 May 2018}}</ref> final report of the Parliamentary inquiry into Carillion's collapse was published on 16 May 2018, and criticised Deloitte for its involvement in the company's financial reporting practices: