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Auditors facing ‘awkward questions’ as Post Office scandal escalates

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ITV’s drama about the wrongful prosecution of hundreds of Post Office staff has prompted the accounting world to question the role of the auditors in the scandal, as national anger about the miscarriage of justice intensifies. 

10th Jan 2024
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Former Post Office chief executive Paula Vennells announced this week she is to hand back her CBE amid fallout from Mr Bates vs The Post Office, which aired on January 1, as ministers attempt to fast-track plans to compensate and exonerate victims.

More than 700 innocent sub-postmasters were prosecuted, and many went to jail for false accounting and theft based on data from faulty Horizon software, built by Fujitsu, between 1999 and 2015.

Lawyers acting for hundreds of victims said more than 100 people had come forward seeking legal advice since the broadcast of the four-part drama, while the Metropolitan Police is now investigating the Post Office over potential fraud offences.

Where were the auditors?

Software testing consultant James Christie has written extensively on the failings of the Post Office and Fujitsu, with no senior figures held to account despite many wrongful imprisonments and the financial ruin of hundreds of sub-postmaster staff.

With a public inquiry ongoing, he said there are “several awkward questions the external auditors should answer”.

EY audited the Royal Mail from 1986 onward, covering the period where the Horizon software was developed and implemented. The Big Four firm continued auditing Royal Mail until 2018, throughout the period in which data from the faulty Horizon IT software was used as evidence to send innocent Post Office staff to jail.

“There are many valid explanations for why we might not know what is happening in a complex system, but a failure to ask pertinent questions is not a good reason,” he said.

The AccountingWEB Any Answers community has also questioned the decisions taken throughout by the auditors, who are likely to face a reckoning given the mounting fury over a lack of accountability.

In several interviews with AccountingWEB, industry experts described a range of errors that could have fuelled the debacle, with leading accountant and past ICAEW president Julia Penny noting “one of the biggest problems was unconscious bias”, and particularly regarding automation.

She noted in ISA 220, paragraph A35 of the application guidance describes the tendency to favour output generated from automated systems, “even when human reasoning or contradictory information raises questions as to whether such output is reliable or fit for purpose”.

“Essentially the root of the issue seemed to be that the system was believed, despite indications that it wasn’t correct,” she said.

“In addition to this, culture must clearly have been a part of this, as it would appear that throughout the Post Office nobody was questioning the findings, or if they were, they were being dismissed as wrong,” she said.

‘Understandable fury’

Steve Collings FCCA, director at Leavitt Walmsley Associates Limited, said he has been following the case closely and is “astonished” that the auditors dismissed the pleas of the staff and assumed they were responsible.

“Part of their remit should have been to think that surely several hundred [sub-postmasters] cannot be stealing money to that extent,” he said.

“Questions should have been asked as to whether this was to do with the systems in place – which clearly they were,” he said. They should not have simply said that the staff were stealing money and that was that. Reports on the Horizon system found that the system had flaws, but this seemed to have been brushed under the carpet.”

He said the fact the case was spiralling into one of the biggest miscarriages of justice in British history also undermined the role of internal audit.

“Given that some of these innocent individuals spent time in prison, ended their lives and caused untold amounts of stress, it is no wonder that the country is absolutely furious,” he said.

Lack of probing

A lack of expertise in assessing the risks of a system handling such large volumes of transactions is also evident, added Leo Smigel, personal finance expert and the founder of Analyzing Alpha.

“Outside auditors who check the books are important because they look at everything with a fair and neutral point of view,” he said. “When issues first came up about money not adding up after putting in the new computer system, the auditors should have taken a close look at what the Post Office was saying.”

Rather than pinning the blame on low-level workers, the auditors should have investigated further to find the real cause, Smigel said.

“A good audit would have checked the software itself for bugs or problems, and made sure the numbers and reports were right. Missing money that big is a huge red flag that needs careful checking before blaming anyone.”

Why audit really matters

Andrew Gosselin CPA, a former senior strategy consultant for a global, multi-billion-dollar software company, and a senior editor at The Calculator Site, said the fiasco should hammer home that “what auditors do really matters”.

“With the Post Office mess, money went missing out of nowhere once a new computer went in,” he said. “Auditors should have looked hard into why this was and checked if the system really worked right.”

Given the job of outside auditors in a case like this is to provide an objective, unbiased look at the financial reports and controls, they “should have paid close attention” to ensure the financial details were right and if the newly implemented system “could really report finances properly”.

“Good oversight is key for catching difficulties early and making sure finances are tracked right,” he told AccountingWEB.

There are lessons for auditors to learn from the saga, added Keith Donovan, business advisor and founder of Startup Stumbles.

“When potential fraud appears, like the missing money after the new computer system, they should dig into the details,” he said. “In my experience, auditors are at their best when collaborating closely with internal teams. That back-and-forth helps auditors identify risks, evaluate controls, and recommend solutions.”

No scrutiny of the system

“The more I think about this Post Office case, the more concerned I am about how the auditors handled it,” said Branson Knowles, head of US digital banking at Top Mobile Banks.

“Any time you see discrepancies crop up right after a big system change that should be a major red flag to auditors that something might be off or, worse, that fraud could be happening,” he said.

Questions over the missing money should have been asked immediately, he said, with a focus on specific transactions that were not adding up, and whether the new system could be at fault.

“At the end of the day, the auditors had a responsibility to figure out why money was disappearing and if any vulnerabilities were being exploited,” he said.

“All in all, this case really makes it seem like they weren't doing thorough enough audits when things started looking off.”

More than 3,500 post office operators were targeted by prosecutors over 16 years with wrongful allegations of theft, fraud and false accounting.

Despite being aware of faults with Horizon, the Post Office continued to push for legal action, with hundreds of individuals prosecuted, whilst many were financially ruined. At least four suicides have been linked to the travesty.

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By Roland195
10th Jan 2024 15:13

Usually happy to join in with any auditor bashing but in this case it seems unfair. The losses, while devasting to individual SPMs, were loose change to the Post Office, particularly in any one year and in most cases, the SPMs had admitted to or at least accepted responsibility.

Given what it took for any potential issues to be admitted to, what are the chances such information would be made available to External Auditors - presumably their own testing showed what we know now - the system appeared to work the vast majority of the time.

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By kirstiej
11th Jan 2024 14:09

It also sounds as though pre automation PO accounts would have been a mess so I suspect that it was customary to sweep any anomalies into a bucket marked “ ????”, and despite all the problems it’s possible that overall the accounts were more accurate after Horizon.

At some point it should have become clear that the transactions didn’t add up, but I can imagine the conversations ‘OK so this never balances, so last year we…’.

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By matthewleitch
11th Jan 2024 14:21

That's quite possible. Designing an overall reconciliation to uncover systematic differences between cash coming in and cash expected might not have been easy and a determined and skilled person or team might have been needed. Also, it might have been complicated by timing differences that meant it was never possible to agree anything exactly.

Having said that, considering larger time periods would have revealed more despite timing differences. I personally have had a great success by graphing daily differences on a cumulative basis. This can identify leakage and even give some sense of when it happens.

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By kirstiej
11th Jan 2024 23:34

Having read about today’s proceedings at the enquiry, it sounds as though the Post Office had no interest in finding out what was going wrong and were deliberately covered up problems with the system.

The ‘investigator’ responsible for putting innocent people in prison and providing witness statements about the reliability of Horizon now says he isn’t ‘technically minded’. It sounds as though instead of employing actual investigators, they just sent round the heavies. This man still works for the post office.

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By GHarr497688
10th Jan 2024 15:28

I have said for many years a computer is as good as the user. Also the principle of balancing computer records to manual records is vital. A computer is just a massive complex desk top calculator . How often have you used a calculator and then had to start again. The number of spread sheets I have seen that are not formulated correctly are amazing as are things like SAGE and Xero churning out rubbish. Now HMRC and Goverenment want to use this rubbish to calculate tax. If you take the PO scandal then surely this proved how dangerous the process is. Auditors just don't care and the figures are so huge they are more or less useless in detecting anything. All madness in my opinion.

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By C Graham
11th Jan 2024 17:08

NOO absolutely so wrong - a computer is only as good as the progam that runs on it. It is way more than a calculator. A computer can search and sort and run reports and graphs on data and also give variables. And do projections and forecasts based on modelling. A calculator cannot do that.

A user is at the mercy of the code that sits beneath and all its bugs. Are you seeing the code behind this and would you know if there was a bug. Almost certainly not.

In this case the Post Office failed to test the system and rolled out a flawed product on unsuspecting postmasters who would have been trained and well acquainted with using the software provided. The shocking fact is that a series of incidents were not identified quickly and instead the blame was put onto the user not Fujitsu - your comment is exactly what was so wrong about this. The user WAS blamed.

Audits should spot and query anomalies but as the Postmasters had to fill any gaps in the account with their own money it is possible the numbers were forced to agree - at tremendous cost to these poor people.

As for manual records - the errors that can slip into a spreadsheet and then get copied are as risky as a bug in the software.

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By Justin Bryant
10th Jan 2024 15:28

What else do they honestly expect? Audit these days is merely a pointless box-ticking exercise (clients basically just pay for the auditor's signature in their accounts and have no concern re audit quality etc.).

Never in a million years would an auditor discover such problems (that of course is not to excuse them). They are far more concerned with not going over budget and getting paid big fees for not much work/risk.

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By D V Fields
10th Jan 2024 17:02

I am not sure it is correct to assert that EY the auditors had not flagged up serious misgivings with the Horizon software. I believe there is evidence they did.

On the other hand applying the criticism to that of the Post Office internal auditors seems valid as it is they who would have dealt with the individuals.

Interestingly one of the finance directors for the Post Office was an ex-auditor of EY who had the Post Office as a client before joining the Post Office. However on reading the amusingly named “statement of fact” from the individual any auditing skills along with many other recollections seemed to have gone by the wayside.

Hopefully some of the Post Office legal team amongst others will have a fair chance to defend themselves against charges leading to custodial sentences.

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By FactChecker
10th Jan 2024 19:08

Julia Penny noted “one of the biggest problems was unconscious bias”, and particularly regarding automation.
[also] noted .. the application guidance describes the tendency to favour output generated from automated systems, “even when human reasoning or contradictory information raises questions as to whether such output is reliable or fit for purpose”.
“Essentially the root of the issue seemed to be that the system was believed, despite indications that it wasn’t correct,” she said.

And THAT is why, irrespective of all the other contributory factors at the P.O., I have no time for the level of over-reliance on I.T. (digital/automation/AI/etc) evinced by politicians and mandarins!

Despite having entered the world of computing back when the beasts were valve (not chip) driven, and made a handsome living out of taming that beast for productive purposes, I've always stated that every system WILL fail (it's not a matter of if but when & how). So any sane person will insist on two accompaniments to the launch of a major new system:
1. a team of investigative experts (developing their skills in tandem with software development) who will provide the backstop to any issues arising that go beyond the skills of front-line support;
2. development of a suite of tools (reviewed through a monthly change management program) that can tackle (identify & rectify) problems as they arise in the live environment.

These foundations were missing for Horizon and appear noticeably absent from every recent HMRC project ... with a common factor of 'admit nothing' being core to senior management culture.

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By Oldmanwetmix
12th Jan 2024 09:05

The recent debacle with Class 2 NI contributions backs up your observations. Like I'm sure many other accountants, we've been hounding HMRC for years on behalf of our clients when Class 2 NI hasn't been taken and now people face a shortfall in their pension entitlement. HMRC's line was originally that the client had simply failed to register for Class 2, even though being in self assessment for many years. In the last year they seem to have acknowledged that their own systems removed people from Class 2 without telling them and have started to allow some corrections. For accountants there is little financial reward in sorting this out, if any. Is this the next scandal?

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By martinengland
10th Jan 2024 22:29

The point for the legacy media to avoid at all costs is that its fellow "stakeholders" engaged in corruption. The plausible deniabilty of the Horizons scam was that it was, at root, a "computer error", meaning that everybody can blame everybody else. For "stakeholders", it is poetry in motion, everything is going to plan.

The current flap of pseudo-activity is short-term "reputation laundering". The medium-term pseudo-activity by politicians, inquiries, audit regulators and the Metropolian Police will all follow the same model as the whitewash activities better known as the Grenfell Tower report, or the Iraq War report. "No-body made this happen", will be the net result. "It was all one huge series of innocent errors."

After the "reputation laundering" phase, the legacy media will memory-hole the story within a week.

Next month, after pretending to investigate something, the Met shall likely find "no evidence" of anything, and quietly drop the matter. The audit regulators might not even indulge the theatre of a pseudo-investigation, likely simply declaring that EY did a credible job, given the standards at the time, and quietly drop the matter.

All the pseudo-investigators will lock themselves into the paradigm of statute law, with deliberate and careful denial of common law. Common law shall likely provide remedies (starting with duty-of-care), but is too "populist" to be acceptable to the "stakeholders", whereas statutes are drafted to ensure that "stakeholders" cannot be prosecuted for their crimes that don't quite match the rules (but non-stakeholders can be convicted of just about anything). For insurance purposes, the "stakeholders" will also be as ignorant as they can about statue law, too, including the Corporate Manslaughter Act and the Health & Safety At Work Act. Everything relevant shall be studiously avoided.

Whereas some sub-postmasters committed suicide as a response to their wrongful, false convictions, the "stakeholders" - and their agents running the Post Office - who profited from the closure of small post offices enjoy their high-life, their bonuses, their pensions and, with one apparent exception, their gongs.

Horizons facilitated false convinctions on a "prove your innocence" basis, which itself required corruption of the criminal justice system, bringing judges into the scam. How judges presided over guilty verdicts given the lack of evidence to test the credibility of the computer is going to be a black stain on the pseudo-justice system for years.

Ultimately, the Horizons scam was a test-run, i.e. will people moronically accept "computer is right?" The answer was clearly "yes". As test-runs go, the "stakeholders" must have been delighted. After the "reputation laundering" phase, "stakeholders" will be free from the limelight to carry on developing a much broader product. Just imagine this: one day in the near future, you'll be convicted of a climate crime, because a model - devoid of real-world data, or indeed anything you actually did - retro-calculated that a flight that, statistically, you would have ordinarily been assumed to have taken one year earlier breached your then carbon allowance. Good luck proving your innocence of that one. You saw it first with the Horizons scam.

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By Mikerichards
11th Jan 2024 15:26

Martin has it spot on - I would bet my pension that his 1st 4 paragraphs exactly summarise the eventual outcome

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By johnjenkins
11th Jan 2024 15:53

You may well be right but what if it wasn't a computer error? What if someone had remote access and did naughty things?

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By Oldmanwetmix
12th Jan 2024 09:10

I can imagine the IT technicians making adjustments on sub postmasters consoles to get the system to work, completely ignorant of the effect it would have on the sub postmasters books.

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By gillybean04
11th Jan 2024 05:22

I sincerely feel for those affected. Because they were not just let down once. They were systematically let down by successive systems, some of whom have a role of acting as a safeguard or control - such as the auditors, police and courts.

While the article rightly (it is accountingweb after all) focuses on the auditing, I find the failing with the most gravity is that of the legal system that apparently found them guilty beyond all reasonable doubt despite the inconsistencies and issues.

I believe we do place an over reliance on computers. There is a belief computers don't make mistakes, that they free from human error. But they aren't, because we build them and code them.

Our whole system is incompetent to the core.

In a twist of irony, we build safeguards and controls because we know things go wrong. Yet those safeguards and controls end up giving us a mentality that things can't go wrong because the control or safeguard would either stop or draw attention to it.

How can we be so brilliant and blind at the same time, sigh.

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By coops456
11th Jan 2024 12:38

gillybean04 wrote:

I sincerely feel for those affected. Because they were not just let down once. They were systematically let down by successive systems, some of whom have a role of acting as a safeguard or control - such as the auditors, police and courts.


The police certainly do let down a lot of people in a lot of ways, but the Horizon investigations were nothing to do with them, nor the CPS, which was created to separate criminal investigations from the prosecution of offences following a string of high-profile miscarriages.

Unfortunately Post Office has the power to bring criminal prosecutions. The Court of Appeal said its approach to investigation and disclosure was ‘influenced by what was in the interests of [the Post Office] rather than by what the law required'
- and surely the prosecutorial power must be stripped from it now.

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By ralan
11th Jan 2024 11:08

So one wonders where all the money these sub-postmasters paid to the post office went, did anyone check where it went or was it just into the coffers of the Post Office to boost
profits and then bonuses paid to the people hiding the errors in the software?
Of course Auditors are not to blame are they, or are they?
Head in the sand situation?

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By matthewleitch
11th Jan 2024 11:17

I wondered if some kind of overall reconciliation might have been possible and shown that the PO was getting cash (from SPMs topping up) that was more than it should have been for the recorded sales (and other transactions).

If there actually was some suspense account somewhere that someone just journalled into other income then that's another failing, and in another department.

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By Friendly Bookkeeper
11th Jan 2024 14:38

matthewleitch wrote:

"more than it should have been for the recorded sales (and other transactions).

But the issue was surely that Horizon was being used to record the daily transactions, and somewhere along the line Horizon was inflating the value of the transactions - which is why the SPMs couldn't balance their physical takings to Horizon. So, if the Horizon figures were used as the sales figure at period end, then the cash wasn't "more than it should have been" according to the accounts.

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By matthewleitch
11th Jan 2024 14:50

Good point, but there may have been other opportunities. For example, if you are selling printed stamps then there's a stock of stamps being received and sent out (presumably not just recorded on Horizon) and money coming in. If you look at benefit payments then there's an amount of benefits you know you should be paying out (again, not just recorded on Horizon) and cash going out. Without knowing more details it is difficult to know what would have been possible.

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By johnjenkins
11th Jan 2024 11:18

So the question now arises "was it contrived"?

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By johnjenkins
11th Jan 2024 11:18

So the question now arises "was it contrived"?

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By johnjenkins
11th Jan 2024 11:19

Hiccups

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By Jason Croke
11th Jan 2024 11:30

This is why the police are looking at criminal charges against the PO, because the PO forced people to handover thousands of pounds for thefts that never occured....presumably in the accounts the PO had a value for "theft" and this figure probably balanced against "recovered from thieves" and so probably netted each other off.

But there was no theft, so PO obtained money by menace, blackmailing people to pay up to avoid jail terms (then prosecuted them anyway and leading to jail).

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By johnjenkins
11th Jan 2024 11:49

I Doubt very much if the Police investigation will get anywhere. The only thing that might happen is, given that the Government had to step in, that a Public Enquiry is announced. Then again we all know what happened so that would be pointless and a waste of more public money.

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By whiteandco
11th Jan 2024 12:40

Don't forget one of the reasons for Paula Vennells getting her CBE - turning the PO into a profitable organisation. Enough said!

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By johnjenkins
11th Jan 2024 13:50

Like a lot of people who are blinkered by the advancement of technology.
The cost of everything to do with high tech is under estimated. Concord, terminal 5, air traffic control, hs2, ambulance service etc. etc. Why is this? The answer is simple, no one asks the people at the receiving end what they think. Hold on, deja vu - MTD.

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By matthewleitch
11th Jan 2024 15:44

It really isn't as simple as that, but underestimating costs and overestimating benefits are typical. The probability of this happening rises with the size of the project.

The explanations probably include some innocent cognitive bias and a lot of not-so-innocent deliberate mis-estimation done to get permission to go ahead with projects. If end users wanted something badly - especially if they weren't paying - then I would expect end user estimates to be biased for similar reasons to system vendors and government departments.

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By Friendly Bookkeeper
11th Jan 2024 14:47

Jason Croke wrote:

This is why the police are looking at criminal charges against the PO, because the PO forced people to handover thousands of pounds for thefts that never occured....presumably in the accounts the PO had a value for "theft" and this figure probably balanced against "recovered from thieves" and so probably netted each other off.

But there was no theft, so PO obtained money by menace, blackmailing people to pay up to avoid jail terms (then prosecuted them anyway and leading to jail).

In the drama, the PO told Jo Hamilton that if she pleaded guilty to fraud, they wouldn't charge her with theft - I believe a similar bargain was made to other SPMs. I think this was largely because the PO couldn't prove any theft - in any of the cases. They were accused of Fraud (or maybe false accounting), because they signed the sheets stating that the balance they declared was in agreement with Horizon, when it wasn't.

Alan Bates wasn't charged with anything, as he never signed the declarations ...

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By matthewleitch
11th Jan 2024 11:12

The 'auditors' we saw in the ITV drama were not external or even internal auditors. They described themselves as the Investigations team. They seemed to behave like ex police officers and assumed they were dealing with criminal behaviour. A team of internal or external auditors (like I was) would have been more focused on the possibility of error. Also, auditors (as opposed to investigators) aim to gain assurance that a system is reliable. That means not assuming it is reliable until there is a good body of evidence showing it is reliable. In the ITV drama we saw the opposite claim made: 'No evidence of problems with Horizon'.

Were there internal auditors in the true sense at all, or were they just investigators?

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By Oldmanwetmix
12th Jan 2024 11:40

The actions of the "investigators" had a bit more clarification in the Inquiry proceedings yesterday when the main man Bradshaw was giving evidence yesterday - covered on the BBC news website. More like debt collectors than investigators

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By Jason Croke
11th Jan 2024 11:27

The PO stopped prosecuting Horizon related thefts in 2015, but the system was still producing inaccurate reports and so whilst I accept that the on a yearly basis the level of theft must have been immaterial in the context of an audit, surely an audit should still ask as to why the level of thefts remained as high as ever before but now without the excuse that the thefts were being prosecuted.

In other words, the auditors knew there were thefts, yes, probably immaterial in value in the scheme of things, but happy that thefts were being prosecuted and the stolen funds returned but once the prosecutions stopped, both the PO and auditors were happy for thefts to continue without any further interaction or attempt to resolve.

If I was auditing a firm that had a couple hundred thousand pounds of theft per year and the firm was doing nothing to tackle or deal with those thefts, then surely that is a failing of the audit. Was the RO not even remotely curious as to why the PO was happy to just accept significant fraud and theft and put it down to materiality.

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By Roland195
12th Jan 2024 10:49

I suspect you were much to clever to get involved in much auditing.

I would imagine that even if such a question were to be raised, the External Auditors would be satisfied with the answer it was proving uneconomic to pursue those thefts or for individual cases to be investigated.

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By Andrew3018
11th Jan 2024 12:53

As external auditors form audit report based on “material” fairness of the accounts, whether the errors were shared or discovered by the auditors, if the management decided that the cause was theft and they were taking actions already, due to the immateriality of the amount involved, it would only have been regarded as a mere footnote as “Internal Control memo points for review and improvement”. Moreover, if there is an effort on the side of management to conceal information from the auditors on purpose, it would almost impossible for auditors to uncover fraud or errors who operates on test and sampling basis. The most an auditor can do in such situation is to qualify an opinion but only if has material impact on the accounts.

IMHO, the blame falls largely on the management, if it’s true that knew about the flawed software and purposely tried to cover up, then they deserve some prison time. What is also concerning is PO method of forcing suspects to admit to a crime they didn’t commit and the level of free and competent legal support vulnerable people gets to defend themselves against pressure and circumstantial evidence.

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By dmmarler
11th Jan 2024 14:23

The system was not designed with the sub-postmasters who were supposed to run it, and they did not have any administration rights over their own part of the system to run checks properly. So when the computer said "no", that was it. This is the fault of the Post Office.

The sub-postmasters' contract was onerous and made not provision for mediation, the provision of evidence, or other discussion. This is the fault of the Post Office.

The external auditors would not be able to find out much unless they had the full co-operation of the Post Office management. I am sure appropriate questions would have been asked. Any problems in this regard are the fault of the Post Office.

That the the sub-postmasters work for the Post Office would have been deemed immaterial for audit purposes is another matter. I believe this is a problem for auditors everywhere as the audit should include materiality for each subsidiary company in a group - which is effectively what the sub-postmasters were.

There are echos of this in the implementation of systems everywhere. This should be a learning curve for all government departments, in case they end up in the dock as well.

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By johnjenkins
11th Jan 2024 14:44

Let's look at it another way. Say 10,000 sub postmasters (way back), say someone had remote access to horizon, say £10 was taken from each. £100,000 in someone(s) pocket(s). Now look at variations of my scenario. This saga has just started.

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By DJKL
11th Jan 2024 17:03

How do they get the physical cash into their own hands, remote from the branch where the actual cash/stamps etc are located?

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By johnjenkins
11th Jan 2024 17:25

I don't know, I'm not a scammer. However let's say a branch is £10 under and that is paid over (it's not really £10 under) then that £10 is syphoned off into whatever account. Maybe the scammers got too greedy. It would be interesting to know how much was under overall and where that money actually went.
I'm just throwing it out there cos it certainly is a possibility.

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By Oldmanwetmix
12th Jan 2024 11:44

IT technicians make adjustments to keep the software going, so you have credit sales, debit??????? I suspect it was debit Sub postmaster debtor account. IT bods probably had no idea of the havoc they were causing.

Then when postmasters paid what they were told they were owed, debit bank, credit suspense account?

Then Debit suspense account, credit unidentified sales.......simples?

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By DJKL
15th Jan 2024 11:30

Certainly from what I have read that appears to be what happened, the subpostmaster pays their £40k to the Post Office for the perceived cash etc shortfall, Post Office goes Dr Bank £40k Cr Suspense 40K and then a few years on releases it to the I & E.

However I have yet to finish the Nick Wallis book so maybe more revelations to come.

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By johnjenkins
15th Jan 2024 11:51

Nick actually said that the investigative journalism that surrounded the scandal was lacking in bite to say the least.

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By matthewleitch
11th Jan 2024 15:23

This article has confused auditors (internal or external) with the PO's Investigations team that we saw in the dramatization and that SPMs described as doing an 'audit'. From their behaviour it looks like these were former police officers, not accountant/auditor types. This, unfortunately, has led to further confusion in the comments reacting to this article.

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By jeremy28
11th Jan 2024 16:29

I have to say that I can't understand how this entire sorry saga has come around.

Surely any total figure is backed up by logs with detail, on a transaction by transaction level.
Did the system
a) create transactions that didn't exist
b) duplicate transactions
c) create totals that didn't match the detail?

If a) - then would there not be a discrepancy to stock levels?
If b) - wouldn't this be noticed?
If c) - surely this would be have been picked up?

Is there an option d?
I can't get my head round how in hundreds of cases simple accounting seems to have been thrown out of the window?

Is the volume of sales in any Post Office too high for this to be monitored independently outside of the computer system (eg with pencil and paper) and then matched to Horizon?

Having said that, looking at the inquiry online, I could well imagine Mr Bradshaw not worrying too much about any of the above.

Heart bleeds for the affected.

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Pile of Stones
By Beach Accountancy
11th Jan 2024 20:48

Back in the late Eighties at a big 8 firm we had a computer audit team for large clients. I wonder what happened to it...

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By C Graham
12th Jan 2024 11:30

Rob Wilson who was head of criminal law at TPO refused to investigate Horizon in case it suggested the Post office had a lack of confidence in the system. He put the company reputation as priority over those poor innocent people and was quoted by general counsel Susan Crichton in 2012 as saying that an audit should not be carried out. And they should get on with the prosecutions. It is the company and its key people who ensured this was never investigated nor found in a specific audit. It was brushed under the carpet.

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Replying to C Graham:
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By D V Fields
12th Jan 2024 12:05

Agreed -- The on-going Post Office Enquiry never fails to surprise.

Now the Post Office lawyers are aggrieved that they are having to work long hours to provide disclosure documents. However going forward they will amend “search terms” so that it it returns fewer finds and then because the returned percentage is so small they will stop doing it entirely.

Most of the witness statements from the Post Office employees are under examination just comical.

One cannot help thinking that if a Post Office representative lips are moving then…. decide for yourself.

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By AndrewV12
12th Jan 2024 13:20

Former Post Office chief executive Paula Vennells announced this week she is to hand back her CBE amid fallout from Mr Bates vs The Post Office,

She gave that back before it was wrenched back, now what about the 2M bonuses.

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Replying to AndrewV12:
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By C Graham
12th Jan 2024 13:58

exactly as they wrongly forced the postoffice masters to fill gaps in shortfalls so then it is entirely appropriate to amend that and force those like her who took the profits gained from that failing system and give it back to those who went under. Plus interest on the years they were not recompensed and HMRC should not be able to claw back tax on what was their own money in the first place.
For her simply to hand back an honour and even then only under immense pressure still amounts to a get out of jail free card. Let her feel the pain of economic hardship - same with all the others who orchestrated and enhanced this misjustice

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By AndrewV12
12th Jan 2024 13:22

with no senior figures held to account despite many wrongful imprisonments and the financial ruin of hundreds of sub-postmaster staff.

I have said it before and I will say it again, never before has failure been so well rewarded.

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By johnjenkins
12th Jan 2024 14:01

The other thing we are now faced with is that (to its credit) Government have more or less pardoned those that have been wrongly accused, it has also pardoned those that have been rightly accused. Surely we have the ability to distinguish the difference or have our powers of detection succumbed to High tech?

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