Risk & Economy » Audit » BT takes £145m hit following accounting inquiry

BT takes £145m hit following accounting inquiry

A review of BT Italia's operations and its accounting practices found “certain historical accounting errors”, with a further investigation to ensue

AN INTERNAL ACCOUNTING INQUIRY at BT Italia has resulted in the telecoms group taking a £145m hit to its balance sheet after it uncovered “inappropriate management behaviour”.

Following “allegations of inappropriate management behaviour” in its BT Italia operations, the company reviewed its accounting practices and found “certain historical accounting errors”, which forced the group to reassess “certain areas of management judgement”.

In a statement announcing group quarterly results, the company said that it had written down the value of items on the balance sheet by £145m following the results of the investigation.

“The writedown relates to balances that have built up over a number of years and our assessment is that the errors have not materially impacted the group’s reported earnings over the previous two years. The amount has been charged as a specific item in our results for the quarter. As a non-cash item in the period it does not impact normalised free cash flow,” the company said.

A full investigation of these matters is ongoing and BT has appointed external advisers to assist with the inquiry. BT said “appropriate action” will be taken as the investigation progresses.

BT said its outlook was not affected.

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