Who audits the internal auditor’s external auditor?

“The auditor of wine retailer and supplier Conviviality could face questions over its role in the company’s collapse.

The Financial Reporting Council (FRC) confirmed to City A.M. that it was “looking closely at the reported accounting issues at Conviviality”.

“If the relevant threshold tests are met in relation to accountants at the company and/or its auditors a formal investigation may be opened,” a spokesperson said.

This follows two profit warnings from Conviviality last month which it said had stemmed from accounting errors.

The first was blamed on an arithmetical mistake, while the second related to an unpaid tax bill.

The company ceased trading on London’s junior market prior to the second announcement, and scrambled to form a rescue plan as its cashflow was hit.

After unsuccessful attempts to save the company with a fundraising backed by drinks giant AB InBev, the company appointed administrators early this month.

Its direct business Matthew Clark Bibendum was sold to Magners Cider owner C&C, while its retail arm which includes Bargain Booze and Wine Rack was sold to Bestway for £7.5m.

Chief executive Diana Hunter stepped down in the midst of the scandal, but she and other board members have faced criticism for a fast-paced acquisition-focused strategy.

The FRC has the power to fine auditors it finds to be substandard, though its powers are set to be reviewed by the government following concern that the bar for misconduct is set too high.”

http://www.cityam.com/284451/kpmg-could-face-questions-auditor-watchdog-after

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