Deloitte found negligent in Priceclub audit
Accounting and auditing firm Deloitte and Touch was today found to have acted in a negligent manner when it audited the published accounts of Priceclub Operators Ltd., which operated the now defunct Priceclub supermarket.
The First Hall of the Civil Court presided by Mr Justice Joseph Azzopardi said that Deloitte had acted in a negligent manner but had not caused the company Valle del Miele, which had instituted the proceedings, to suffer damages as a consequence.
Valle del Miele claimed that it was owed around Lm150,000 by Priceclub and had continued to extend its credit to the company on the basis that the audited accounts of June 30, 2000, provided no indication that the company had financial difficulties. To the contrary the report provided a positive outlook.
Nevertheless, Priceclub stopped paying its creditors in April 2001 and external consultants were commissioned to examine the accounts with the result that Priceclub owed millions of the former Lira to creditors.
Mr Justice Azzopardi said that Valle del Miele had based its decision to continue supplying Priceclub on the audited accounts provided by the company rather than make its own checks into the accounts of the company.