Accountancy firm Grant Thornton was today fined £650,000 and one of its partners £20,000 for failures in the auditing of a publicly listed company.
Regulator the Financial Reporting Council (FRC) said it had sanctioned the firm with a £650,000 fine (discounted to £422,500) and one of its partners £20,000 (discounted to £13,000).
It has also made a declaration that the 2016 audit report did not satisfy requirements.
Grant Thornton has agreed to pay the costs of the investigation.
The FRC said the audit work on the unnamed company’s principal assets was inadequate and failed to select an audit sample that was sufficient to reduce the sampling risk to an acceptably low level.
It also said that audit team placed undue reliance on the company’s externally appointed experts in the valuation of the assets.
There were also failures to exercise sufficient professional scepticism and to prepare adequate audit documentation, the watchdog said.
However, it said that none of the breaches were intentional, dishonest, deliberate or reckless.
Despite the breaches, the FRC said the company’s 2016 accounts do not require restatement.
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A spokesperson for Grant Thornton UK said: “We acknowledge the FRC’s announcement and regret that we fell short of expectations in this instance.
“We note that the FRC’s decision does not question the truth or fairness of the company’s financial statements for the relevant year end. The regulator also recognises that we have since taken a number of proactive steps to improve quality, including improvements in our training programmes, which build on the measures we announced earlier this year to strengthen audit quality within our firm.”
Grant Thornton is currently being investigated by the regulator for its audits of cake chain Patisserie Holdings for 2015-2017 and its audit of the financial statements of outsourcer Interserve for 2015-17.
It is also being investigated for its audit of Sports Direct in 2016.
In August 2018, Grant Thornton was fined £3m for failures connected to the auditing of Vimto-owner Nichols and the University of Salford.