The Financial Reporting Council (FRC) has opened an investigation into the audit of embattled retailer Joules today after Deloitte signed off its accounts before the firm filed for bankruptcy last year.
In a statement this morning, the audit watchdog said it had made the decision to investigate Deloitte’s audit of Joules’ accounts for the year up to the end of March 2021.
The move to scrutinise the audit came in March, three months after Joules was rescued from bankruptcy by high street stalwart Next in a £41m move which saved some 1450 jobs.
A spokesperson for Deloitte said this morning the firm would “co-operate fully with the Financial Reporting Council’s investigation” and remains “committed to the highest standards of audit quality.”
The investigation into Deloitte’s audit of the firm comes after the FRC fined the firm £900,000 over its audits of building materials supplier SIG in December for the 2015 and 2016 financial years, after it admitted breaches over its work on SIG’s financial statements.
Leicestershire-based Joules struggled to survive as the pandemic hammered the retail sector and triggered a major decline in footfall. The firm’s premium fashion goods have also suffered a tricky period as consumers tighten the purse strings amid a cost of living crunch.
Next is looking to relaunch the brand later this year through its Total platform but announced last month that it had launched a fresh consultation on job cuts last month.
As part of the deal to save the firm in December, founder Tom Joule, who set up the firm in 1989, took a 26 per cent stake in the company.
Joules was contacted for comment.