it just gets worse

Auditors steer from ABC Learning CentresArticle from: Font size:

comment Anthony Marx

September 02, 2008 12:00am

THE former auditors of beleaguered ABC Learning Centres distanced themselves yesterday from any responsibility for delayed full-year results expected to show greater losses than anticipated.

Pitcher Partners managing partner Paul Green said his firm ceased working with Australia's biggest childcare provider last year and would have had no knowledge of up to $200 million in additional writedowns expected in addition to a pre-tax loss of $437 million already flagged.

"Back in March 2007 we indicated we wanted to resign on the audit of that company, which we did prior to their annual general meeting in November 2007," he said.

"We haven't been involved since that time. We haven't been involved in recent discussions of prior year writedowns and therefore are not able to comment."

Accounting firm Ernst & Young has taken over as auditors and are now poring over prior year records of the Brisbane-based company.

ABC Learning chief executive Eddy Groves reportedly told other media that differences between the two accounting firms were to blame for a restatement of accounts. That, in turn, had led to the delay in releasing results and an ongoing share trading suspension.

The writedowns are thought to be related to ABC's ill-fated expansion in the US and the partial sale of those assets.

Some analysts believe an adjustment of earlier accounts could result in the contravention of banking covenants.

Mr Groves last week rejected speculation that ABC would collapse or that he would step down as chief executive.

ABC Learning shares remain frozen at 54c.


Its everyone' else fault that ABS is so deep in the mire. I guess the the CEO is totally blameless. Eddie take the hint resign. The company if it survives will just continue to sink whilst you are at the helm. You may know alot about the child care centre business but not much about running a major business. It may well be that shareholders may not even be able to sue the former auditors if as it seems they have have qualified their reports to be great degree.