The In­sti­tute of Char­tered Ac­coun­tants (ICATT) was mov­ing to dis­ci­pline the man­age­ment of Price­wa­ter­house­C­oop­ers (PwC) in 2009 af­ter a re­port it com­mis­sioned from a Lon­don foren­sic ac­count­ing firm, FTI Con­sult­ing, raised se­ri­ous con­cerns about how the firm had con­duct­ed its au­dit of Cli­co in 2007.

How­ev­er, the Gov­ern­ment de­ci­sion to call a com­mis­sion of en­quiry in­to Cli­co af­ter its col­lapse in 2009 scut­tled the move.Af­ter re­view­ing PwC's 2007 au­dit of Cli­co, FTI ex­pressed con­cerns about the au­dit in its Oc­to­ber 2009 re­port to ICATT.

ICATT, the gov­ern­ing body for the lo­cal ac­count­ing fra­ter­ni­ty, had hired FTI to do the foren­sic au­dit to de­ter­mine whether its rules of pro­fes­sion­al con­duct had been breached. Ac­cord­ing to clause 18 of ICATT's rules and reg­u­la­tions, in­sti­tute mem­bers must ob­serve prop­er stan­dards of pro­fes­sion­al con­duct and re­frain from any mis­con­duct, which in­cludes acts or omis­sions like­ly to bring dis­cred­it to them­selves, the in­sti­tute or the ac­coun­tan­cy pro­fes­sion. Mem­bers who fail to ob­serve these stan­dards may be sub­ject to ICATT's dis­ci­pli­nary pro­ce­dures.

When the T&T Guardian con­tact­ed FTI's Lon­don of­fice on the re­port, spokesman Heather Mc­Connell said FTI had done the re­view in 2009 and ver­i­fied the au­thor of the re­port sent to ICATT.An­tho­ny Pierre, who was ICATT pres­i­dent in 2009, al­so con­firmed the ex­er­cise had tak­en place. He said the lo­cal ICATT body had been do­ing its work on the is­sue.

The FTI re­port not­ed that in Jan­u­ary 2009, "with­in just two months of com­ple­tion of the 2007 Group au­dit, CL Fi­nan­cial was in se­ri­ous fi­nan­cial dif­fi­cul­ties" and re­quired sig­nif­i­cant sup­port from T&T's Cen­tral Bank.

It al­so not­ed var­i­ous ar­eas of weak­ness and com­mer­cial risks which "paint­ed a pic­ture of a com­pa­ny with sig­nif­i­cant is­sues which, apart from the eco­nom­ic en­vi­ron­ment, should lead to a close ex­am­i­na­tion of the go­ing con­cern is­sue."

Oth­er con­cerns raised by FTI in­clud­ed in­ter-group trans­ac­tions, whistle­blow­er is­sues, the val­u­a­tion of un­quot­ed as­sets, man­aged funds, un­der­ly­ing prof­itabil­i­ty and is­sues with the Cen­tral Bank of T&T.

Oth­er mem­bers of the 2009 ICATT ad­min­is­tra­tion which man­dat­ed the FTI re­port told the T&T Guardian the mat­ter was se­ri­ous and had been tak­en on board by ICATT with all the se­ri­ous­ness re­quired.

They said at the time, ICATT had com­plet­ed in­ves­ti­ga­tions and was in the process of tak­ing it to the next lev­el of ask­ing PwC to re­spond to the con­cerns made in the FTI re­port. The dis­ci­pli­nary process would have been the next phase of the process but the com­mis­sion of en­quiry in­to Cli­co was es­tab­lished.

They said the com­mis­sion's com­ing in­to be­ing led to the ICATT process be­ing sus­pend­ed since ICATT was ad­vised it was not ap­pro­pri­ate to pro­ceed while an en­quiry was be­ing un­der­tak­en.

"If not for the com­mis­sion of en­quiry, we would have tak­en ac­tion on this mat­ter al­ready," said one source.Both of the PwC per­son­nel with whom FTI's in­ves­ti­ga­tor in­ter­act­ed dur­ing the re­view of the au­dit have since re­tired, PwC's com­mu­ni­ca­tions of­fi­cer Mar­sha Ca­ballero-Stew­art said.

Con­tact­ed on the mat­ter, PwC's Sean Ramirez, ter­ri­to­ry as­sur­ance leader, said he had not seen the FTI re­port and could not com­ment.Cur­rent ICATT pres­i­dent Derek Mo­hammed said: "We're re­view­ing our po­si­tion, based on ad­vice, and a state­ment will be made in due course very soon on the en­tire sit­u­a­tion, all of it.

"Due to the sen­si­tive na­ture of the mat­ter we do not want to taint any process, whether ICATT's or the com­mis­sion of en­quiry."Mo­hammed was ini­tial­ly con­tact­ed by the T&T Guardian on Tues­day about the im­pli­ca­tions for the in­dus­try af­ter al­le­ga­tions about the pur­chase by cer­tain PwC di­rec­tors of apart­ments at CLF's One Wood­brook Place lux­u­ry apart­ments.

In view of those al­le­ga­tions, Mo­hammed was al­so asked about PwC's re­ceipt in 2010 of a pres­ti­gious "qual­i­ty checked" award from the As­so­ci­a­tion of Char­tered Cer­ti­fied Ac­coun­tants (AC­CA). It was stat­ed then that in or­der to achieve the award, PwC Trinidad had to demon­strate, dur­ing a rig­or­ous in­spec­tion by AC­CA com­pli­ance of­fi­cers, it had ap­plied best prac­tice.

ICATT has over­sight for prac­tice mon­i­tor­ing. ICATT said there were dif­fer­ences be­tween the qual­i­ty check pro­ce­dure and an au­dit.