iSoft accounts under investigation

The software provider has launched an inquiry into its own past accounts after an audit reveals potential irregularities, but it denies this will further damage its NHS IT deal

Embattled healthcare software provider iSoft has announced it is investigating "possible irregularities" in its former accounting practices.

The company had already been implicated in delays to the NHS Connecting for Health project, for which it is subcontracted through Accenture and CSC. This latest issue could lead to further setbacks for the scheme.

"As part of the audit we're going through at the moment, we recently announced a change in accounting policy for revenue recognition, so the auditors have to go back several years to restate the comparative figures," John White, iSoft's head of corporate communications, explained to ZDNet UK on Friday.

"In the course of doing that they have discovered occurrences where revenue appears not to have been recognised in accordance with the previous revenue recognition policy."

White said he thought it unlikely that Accenture would sever its relationship with iSoft over the issue — a relationship that some claim has already been harmed by iSoft's recent restatement of accounts and the subsequent resignation of its chief executive officer, Tim Whiston.

White also claimed that iSoft was relatively on course to deliver on its NHS contracts, adding: "Most suppliers are behind for a whole variety of reasons, and our situation is not much different."

The investigation will involve past directors such as Whiston and his predecessor, Patrick Cryne, according to Ovum analyst Richard Holway.

"Also [Director-General of the Confederation of British Industry] Sir Digby Jones was iSoft's senior [non-executive director] and sat on its audit committee during the period in question. This should be taken as yet another cautionary lesson to anyone who takes on a non-executive directorship lightly," Holway said on Friday.