Regulators to investigate iSoft

Accountancy regulators are set to investigate troubled software firm iSoft and its auditors.

The Accountancy Investigation and Disciplinary Board (AIDB) is set to investigate iSoft’s directors and its former auditor, RSM Robson Rhodes.

In August, the board said it had uncovered evidence of irregularities affecting its 2004 and 2005 accounts.

The admission came months after the firm was blamed for delays in a £2bn plan to upgrade NHS computer systems.

In a statement, iSoft added that investigators – whose powers are limited to registered accountants and accountancy firms – would be targeting its financial years from 2003 to 2005, when Robson Rhodes was its auditor.

Executive and non-executives at the group during the period will also face scrutiny.

In August iSoft said an investigation by its new auditor Deloitte had unearthed “accounting irregularities” relating to 2004 and 2005. The news led to the suspension of its operations director.

News of the official inquiry comes weeks after the group admitted it was in takeover talks with potential suitors, as its board had determined such action was in the best interests of shareholders.

Shares in the firm have tumbled by almost 90% as it has struggled with its £6.2bn contract to upgrade NHS computer systems.

The project has been hit by a string of delays and other problems, leading to a number of profit warnings.

Just three months after posting annual losses of £344m, iSoft warned revenues would be 10% to 15% lower than many analysts had expected.

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