Grant Thornton (EDDC’s auditors) delay Sports Direct results

Owl says: not the first of the big auditors to get caught up in new, tighter regulation and certainly not the last.

“Retail tycoon Mike Ashley spooked investors on Monday after bosses at his tracksuits and trainers empire Sports Direct were forced to delay publication of its full-year results.

The acquisitive group’s highly-anticipated results were due to be published on Thursday but now the City may need to wait until August 23rd to glimpse beneath the bonnet of the firm.

Fearing the worst, investors fled. Shares slid 15 per cent in early trading on Monday to £2.20 – near to a seven-year low and well below the firm’s 2007 flotation price of £3.00. …

It said that its auditors at Grant Thornton need more time to sign off the accounts due to increased regulation and also pointed to ‘uncertainty’ around the future trading performance of House of Fraser, which it bought in a pre-pack administration for £90million last summer.

‘The reasons for the delay are the complexities of the integration into the company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business, together with the increased regulatory scrutiny of auditors and audits,’ the group said. …”

https://www.thisismoney.co.uk/money/markets/article-7248053/Sports-Direct-shares-slump-billionaire-retail-tycoon-Mike-Ashley-delays-results.html

“Council accounts audit to be delayed by ‘issues’ at external auditors Grant Thornton”

Grant Thornton are EDDC’s external auditors. They were EDDC’s auditors who found nothing untoward for EDDC after the disgraced ex-Tory councillor Graham Brown affair:

https://eastdevonwatch.org/2016/03/06/external-auditors-watchdogs-or-bloodhounds/

“Grant Thornton’s issues have meant that Teignbridge District Council’s accounts will not be audited on time.

The council’s statement of accounts and financial records for the 2018/19 financial year were due to be audited by the external auditors Grant Thornton during June and July.

However, Cllr Alan Connett, portfolio holder for corporate resources, told Monday’s executive committee that the no date for when the audit would take place was yet known.

He said: “We anticipated that the audit would be taking place in July but we have been told by them that they are unable to do so because of pressures at their end. We are organising when the audit will be done but Grant Thornton will be providing a letter of exoneration to us to make it clear it is down to their internal issues and so no-one thinks that the council is to blame.”

Cllr Stephen Purser questioned whether the council would be penalised in any way or would be censured by the government if the accounts were not audited by the July 31 deadline.

In response, Cllr Connett said: “I was concerned about this but I am assured there is no penalty for us. Grant Thornton will provide a ‘letter of comfort’ that sets out their issues and what caused the issues and that the council are not at fault. We are where we are. They are the appointed auditors for us, but we will express our concern about this and hope the letter comes to us soon.”

Grant Thornton have recently faced heavy criticism of their audit practises bakery chain Patisserie Valerie last year admitted to a significant accounting fraud that its external auditors failed to spot, with Grant Thornton remaining under investigation by the UK accounting watchdog over its work for Patisserie Valerie.

The firm also received its largest fine of £3m from the accounting watchdog last August, and was ordered in January to pay a landmark £21m negligence claim in relation to its audit of Assetco, a business that once leased London its fire engines. Its audit of FTSE 250 government contractor Interserve is under scrutiny by the accounting regulator.

The firm at the start of June appointed a new head of audit – Fiona Baldwin – the second time in 12 months an appointment to that role had been made.

An independent review into its accounting operations to improve standards has since been announced by the firm. …”

https://www.devonlive.com/news/devon-news/council-accounts-audit-delayed-issues-3045592

EDDC’s external auditor tightens its procedures after Patisserie Valerie scandal

“Grant Thornton announced an independent review and a 7 million pound revamp of its UK accounting operations on Saturday to improve standards after regulators opened an investigation into its audit of café chain Patisserie Valerie that came close to collapse last year.

The accounting firm said the measures were part of its response to recent “scrutiny of its audits of large listed companies”, and wider efforts to prepare the business to compete for audit work from Britain’s top 350 listed companies “should changes in the market present a more level playing field for competition”.

Britain’s accounting watchdog, the Financial Reporting Council, said in November it was investigating Grant Thornton’s audit of Patisserie Valerie for 2015-2017.

Dave Dunckley, chief executive of Grant Thornton in Britain, said the firm would work with clients and the regulator to go further.

“The independent review of our audit practice this autumn will be an important part of our continued efforts to improve,” Dunckley said in a statement.

Britain’s Competition and Markets Authority has proposed sweeping reforms of the UK audit market after questions were raised about accounting standards following the collapse of retailer BHS and construction company Carillion, which took place before Patisserie Valerie’s problems were came to light. …

https://uk.reuters.com/article/uk-britain-accounts-grantthornton/grant-thornton-revamps-uk-audit-after-patisserie-valerie-scandal-idUKKCN1TN0DV?

“Scandal-prone beancounter KPMG fined £40m after staff cheat on ethics exams and get illegal tip-offs about inspections”

Perhaps one of the TiggerTories first scrutiny and audit and governance efforts should be to check on its own auditors, Grant Thornton, who have also had their share of scandals!

https://eastdevonwatch.org/2018/10/14/eddcs-auditors-grant-thornton-in-the-bad-news-spotlight-again/

https://eastdevonwatch.org/2018/08/29/grant-thornton-eddcs-past-and-present-auditor-in-record-fine-as-auditing-scandal-spreads/

“Tainted KPMG has been fined £40million because staff cheated on ethics exams and were given illegal tip-offs about inspections by regulators.

The accountancy firm was hit with the penalty in the US after the Securities and Exchange Commission uncovered a host of bad behaviour. Accountants at the firm shared the answers to internal training exams, the SEC said, including papers meant to grill them on ethics and integrity.

Staff also hacked the websites used to carry out the tests to make the pass score lower, allowing them to get through even if less than 25 per cent of answers were correct.

And senior employees at KPMG obtained confidential lists of audits being inspected by the American Public Company Accounting Oversight Board.

This information allowed them to secretly alter reports so that the firm was less likely to be found to have carried out poor-quality work.

Jay Clayton, SEC chairman, said: ‘KPMG’s ethical failures are simply unacceptable.’

Steven Peikin, of the SEC’s enforcement division, said: ‘The breadth and seriousness of the misconduct at issue here is, frankly, astonishing.

‘This settlement reflects the need to severely punish this sort of wrongdoing while putting in place measures designed to prevent its recurrence.’ “

https://www.thisismoney.co.uk/money/markets/article-7151099/KPMG-fined-40m-staff-cheat-ethics-exams-illegal-tip-offs-inspections.html

Company auditing EDDC under investigation for “Patisserie Valerie” black hole

“Accountancy firm Grant Thornton is under investigation for its role as the auditor of Patisserie Valerie, the bakery chain which nearly collapsed last month after it discovered a £40m black hole in its accounts.

The Financial Reporting Council (FRC) said it was investigating the audits of the financial statements of Patisserie Holdings – the chain’s parent company – for the years ended 30 September 2015, 2016 and 2017.

The accountancy watchdog said it was also investigating the “preparation and approval” of financial statements by Chris Marsh, the former finance director of Patisserie Holdings who was suspended from the company when the black hole was found in October. Marsh was subsequently arrested on suspicion of fraud and bailed, before resigning from the company.

A spokesman for the FRC said it had moved quickly to consider whether the case required an investigation and that this was just the beginning of a process which could take up to two years to complete.

“The important thing is to do a thorough job and get the right decisions. Investigators could have thousands of emails and different pieces of paper to examine, so it’s not something that can be done quickly,” he said.

Once the FRC has completed the investigation, it will decide whether it has a case against Grant Thornton and Marsh to be presented to a tribunal, which could ultimately lead to a fine or, in the case of individuals, banning them from practising as accountants.

A spokesman for Grant Thornton said: “I can confirm we have received a letter from the Financial Reporting Council informing us of its decision to commence an investigation, and we will, of course, fully cooperate in this matter.” …

https://www.theguardian.com/business/2018/nov/21/patisserie-valerie-accountants-face-black-hole-investigation

EDDC’s auditors (Grant Thornton) in the bad news spotlight again

“… In May, Patisserie Valerie said that it had £28.8m in cash reserves, while half-year profits were 14.2% up on the previous year at £11.1m.

On Thursday, the firm announced that its board had found “a material shortfall between the reported financial status and the current financial status of the business”.

Grant Thornton, which has audited the firm’s accounts since 2010, said it would not comment on Mr Johnson’s revelations to the Sunday Times.” …

https://www.bbc.co.uk/news/business-45854817

“Audit watchdog vows to restore public trust in sector”

Owl says: too late for us. EDDC’s then (and now) external auditor was given a consultancy contract to investigate the ramifications of the Graham Brown scandal:

https://eastdevonwatch.org/2016/03/06/external-auditors-watchdogs-or-bloodhounds/

https://eastdevonwatch.org/2017/11/08/so-guess-who-eddcs-new-external-auditors-will-be/

Maybe the Financial Reporting Council would be interested in this seeming conflict of interest?

“The UK’s audit watchdog has announced a reform programme to restore the public’s “falling trust in business and the effectiveness of audit” after its work showed that high-quality auditing was not being “delivered consistently”.

The Financial Reporting Council will implement a series of measures including increased monitoring and assessment of risks, and scrutiny of the future needs of investors and audit quality.

It will also address auditor independence, including banning accounting firms from providing consultancy work to companies they already audit.

The watchdog plans to work closely with the Competition and Markets Authority (CMA) on this issue.”

https://www.telegraph.co.uk/business/2018/10/08/audit-watchdog-vows-restore-public-trust-sector/