Watchdog LLP a firm of registered auditors was the auditor of Morell plc. Morell

Watchdog LLP a firm of registered auditors was the auditor of Morell plc. Morell plc published an unaudited interim financial statement in mid-October 2011. Shortly after that Jabez plc made a take-over bid for Morell plc valuing it at 350m. The bid was initially rejected by Morell plcs board of directors on the grounds that it was too low. To support that view on November 5 2011 Morell plc issued a forecast showing a 50 per cent increase in profits before tax for the year ended March 31 2012. This document included a letter from Watchdog LLP stating that the forecast had been properly compiled in accordance with the companys stated accounting policies and a letter from Morells investment bank Podmore & Co. asserting that the forecast had been made after due and careful inquiry. As a result Jabez increased its bid to 400m. and completed the take-over in mid-December 2011.