Thursday 31 October 2019 1:14 pm

All Grant Thornton's scandals are denting partners' profits

Partner profit at embattled accountancy firm Grant Thornton UK dropped this year after the firm was embroiled in a series of scandals and its chief executive stepped down after an internal coup.

In a year to forget for the UK’s sixth-largest accountancy firm, partner profits fell nearly six per cent to £323,000 from £343,000.

The number of partners grew from 188 to 200 and revenue increased modestly to £501.8m from £490.8m last year.

Read more: Grant Thornton’s new CEO makes a huge fraudian slip

Last October, the firm’s chief executive Sacha Romanovitch – the first woman to run a major UK accountancy firm – stepped down after a press briefing purporting to come from a group of 15 partners at the firm savaged her leadership style.

The briefing accused Romanovitch of pursuing a “socialist agenda” and said the firm had no focus on profitability under her leadership. 

Her successor, Dave Dunkley, took over in November and will be under pressure to improve partner profits at the firm.

Dunkley also faces the challenge of improving the firm’s audit performance which was slammed by the audit watchdog the Financial Reporting Council (FRC) which criticised the firm’s performance auditing its highest-risk clients.

Other issues in his in-tray include the FRC’s investigations into the firm’s audit of Patisserie Valerie after a £94m black hole was found in the cake-chain’s accounts.

Read more: Accounting watchdog to investigate audits of outsourcer Interserve’s financials by Grant Thornton

In April, the FRC said it was investigating the firm’s audit of outsourcer Interserve for 2015, 2016 and 2017.

The firm is also being investigated for its 2016 audit of Sports Direct which it dropped as a client this year.

Dunkley said he was “confident that the changes I have made set us up to maximise the market opportunities in the future, generate higher levels of profitability and will cement our position as the leading challenger firm in the large audit space with quality at the heart of all we do”.

Grant Thornton also said it was delaying its accounts this year.

A spokesperson for Grant Thornton said: “The firm has decided to adjust its financial year end from 30 June to 31 December, as a later year end better matches the seasonality of our business and aligns with our global reporting commitments. This will not have any adverse impact on our people or clients.”