UK Treasurer Grant Thornton Fined for Patisserie Valerie Chain Audit

London — Accounting firm Grant Thornton was fined in an audit of Patisserie Valerie, a British cafe chain that collapsed in 2018, unemployed 900 people and triggered another fraud investigation into accounting fraud.

The Financial Reporting Council (FRC) has fined Grant Thornton £ 4 million ($ 5.47 million), but has imposed mitigating factors and non-financial measures to improve procedures, resulting in £ 2.34 million. Said to reduce.

The FRC said Grant Thornton’s 2015, 2016 and 2017 audits missed the “danger signal” and couldn’t stop and challenge the management of the cafe chain.

Grant Thornton’s Patisserie Valerie Audit Partner, David Newstead, was fined £ 150,000 and reduced to £ 87,750 for mitigating factors.

Fines are low compared to record or near record double-digit amounts paid by larger accounting rivals in recent years as they tried to fend off criticism that Watchdog was too soft following the collapse of other businesses. is.

The FRC said it took Grant Thornton’s “scale, financial resources, and financial strength” into account when determining the level of sanctions. The accountant provided an “extraordinary level of cooperation” in the investigation, it said.

Grant Thornton’s 2020 net income was £ 471m and the underlying transaction income was £ 72m, an increase of 14% over the previous year.

“I regret that the quality of our work was lower than we expected in this case,” Grant Thornton said.

“Since the period of the problem, we have invested heavily in audit work to ensure more consistent quality and have begun to see the significant consequences of this investment,” he said in a statement.

The Serious Fraud Office in the United Kingdom is investigating Patisserie Valerie, who arrested former financial officer Chris Marsh and several others.

Grant Thornton said he would continue to strictly defend the civil proceedings filed by the Patisserie Valerie liquidators.

“We recognize that our auditing efforts were flawed, but our work did not cause business failure,” said Grant Thornton.

($ 1 = 0.7311 pounds)

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