Audit industry is broken, admits Grant Thornton as it demands overhaul to reduce the power of its rivalsBy James Burton For The Daily
Audit industry is broken, admits Grant Thornton as it demands overhaul to reduce the power of its rivals
James Burton For The Daily Mail
Accountant Grant Thornton is demanding a major overhaul of the industry
An accountant responsible for a string of scandals has claimed that the audit market is ‘broken’.
Grant Thornton is demanding a major overhaul of the industry to reduce the power of its biggest rivals.
But critics accused the company of lacking ‘humility’ over its own failings as it has been responsible for some of the profession’s biggest mistakes, which included work for Patisserie Valerie and BHS, both of which collapsed.
In a letter to MPs on the Business Select Committee, who are investigating proposed accounting reforms, Grant Thornton said: ‘The FTSE 350 audit market and the actual audit product are both broken.
‘Reform is needed. It is in everyone’s interests – including UK plc – to build trust and integrity in this market.’
Grant Thornton has been accused of failing to spot a £40million accounting scandal at cake maker Patisserie Valerie, where the former finance chief has been arrested on suspicion of fraud.
The audit firm also advised would-be retail tycoon and three-times bankrupt Dominic Chappell when he bought BHS for £1 in a disastrous takeover three years ago.
Chief executive Sacha Romanovitch quit in 2018 after a letter was sent to national newspapers – allegedly backed by 15 partners – accusing her of pursuing a ‘socialist agenda’.
Grant Thornton admitted in its letter to MPs that it has sometimes fallen short of the standards required, but claimed it is focused on improving performance.
Labour MP Peter Kyle, who is on the business committee, said: ‘Grant Thornton is right to identify a broken market, but it has a lack of awareness of its own culpability in undermining the credibility of its industry. It was involved in this.’
Grant Thornton: Catalogue of failure
- Grant Thornton missed an alleged £40million fraud at cake maker Patisserie Valerie
- Advised thrice-bankrupt Dominic Chappell on his disastrous takeover of BHS
- Facing investigation over payments by Mike Ashley’s Sports Direct to a firm owned by his brother
- Fined £3million for misconduct in audits of Vimto-maker Nichols and Salford University
- Fined £2.3million in 2017 for audit failings at fire service contractor Assetco
- Sued by Manchester Building Society over accounting errors in 2015
- Boss Sacha Romanovitch quit after senior staff ran a campaign against her