Statement Issued on Behalf of Mr T Whiston : Financial Reporting Council Concludes Investigation21.12.2015
Mr Whiston is delighted that this long and drawn out episode in his life has finally concluded, with the FRC’s investigation ultimately confirming that there is no suggestion of any dishonesty on his part.
Mr Whiston accepts that he, as CEO of iSOFT, should have done more at the time to satisfy himself that the treatment of the revenues from the Irish contract (which is the sole contract to which the complaint related) was permissible and to ensure that others were fully aware of the situation, prior to it ultimately being signed. He regrets that with his attention at the time focused elsewhere (particularly on the NPfIT contracts and the Torex merger) the treatment of the Irish contract did not receive the attention and scrutiny that it required.
iSOFT’s policies and approach in relation to revenue recognition were based upon advice previously given by the company’s then auditors. Robson Rhodes had previously advised Mr Whiston, in relation to a significant number of similar software contracts at a time when he was FD, that revenue could properly be recognised under the applicable accounting rules prior to final contract signature or authorisation of funding providing there was sufficient confidence in the commercial substance of the contract. It was therefore Mr Whiston’s understanding that it was permissible to recognise revenue in such circumstances. It is now clear that this advice from Robson Rhodes, who were themselves subsequently the subject of FRC complaint proceedings in relation to their auditing of iSOFT, was defective.
The subject matter of this complaint dates back over ten years, and it is highly regrettable that settling of the FRC matter was delayed by the intervening proceedings brought against iSOFT directors by the FCA, and which culminated in the allegations being thrown out once the FCA were forced to admit that, as a minimum, they ought to have known that certain key evidence upon which their case was built was never how they had sought to present it.
Mr Whiston is relieved finally to be able to put this matter behind him, and somewhat older and significantly wiser he looks forward to being able to get on with his life.