THE troubled software group iSoft, a key player in the £6.2billion computerisation of NHS patient records, revealed last night that it had found possible accounting irregularities.

The company, which has issued a series of profit warnings and announced a restatement of its accounts amid uncertainty over the NHS project, said it had launched an investigation into possible irregularities over revenue recognition.

ISoft said in a statement after the market closed that it did not expect the irregularities to have a material impact on predicted revenue of £195 million to £200 million announced last month under its new accounting policy.

However, a spokesman said it was too early to say how material the impact would be on previous years’ figures or how far back the possible irregularities go. It said its already postponed results would now be further delayed.

The spokesman said the possible problems had been discovered by Deloitte while it was completing its end-of-year audit of iSoft’s figures. He added: “This is about revenue recognition. There is no question of misappropriation or anything like that.”

The news caps a terrible period for the company, wiping out the optimism created in 2004 when it won a £300 million slice of the NHS contract. Analysts believe it is increasingly likely that iSoft may be kicked off the project and replaced with an American rival.

The new accounting policy on revenue recognition announced last month puts the company in technical breach of some banking covenants, and it has been locked in discussions with its banks to hammer out a new formula on its covenants.

Since the end of August, the shares have fallen from 456½p to 61¾p on fears over its ability to survive the crisis that has already claimed the scalp of Tim Whiston, its chief executive.

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