Investigation launched into audit of collapsed UK contractor ISG

The Financial Reporting Council (FRC) said its investigation would probe an audit conducted by accountancy firm Macintyre Hudson (MHA) of the consolidated financial statements of ISG Limited, for the year ended 31 December 2022.

The decision came at a meeting of the FRC’s Conduct Committee on 21 January this year.

ISG held more than £1 billion worth of government contracts when it fell into administration, and 2,200 workers were made redundant. The company, whose debts had spiralled to over £1 billion, was the target of a take-over by a holding company fronted by South African businessman Andre Redinger. But ISG’s US owner Cathexis ultimately rejected the offer just prior to ISG’s collapse.

The company did not file its 2023 accounts but had been on course to make a post-tax loss of £133 million, from a turnover of £2.2 billion.

At the time of its collapse, the company blamed a series of large, loss-making contracts secured between 2018 and 2020 that saddled the business with liquidity problems that ultimately it was unable to trade its way out of.

A spokesperson for MHA said: “MHA is committed to audit quality and we will be co-operating fully with the FRC as part of this investigation.”