The FRC has slapped Grant Thornton with a £975,000 fine as the two-year accounting probe into its audit of Manchester Building Society’s use of interest rate swaps was finally settled.
Alongside the fine, the prestigious firm received a severe reprimand and had to pay costs of £85,000 toward the executive council's expenses.
Alastair Nuttall and Marcus Swales, who were the GT's audit engagement partners in relation to Manchester Building Society, were fined £39,000 and £45,500 respectively, as well as receiving reprimands.
“This outcome sends a clear message to accountants and accountancy firms involved in the audit of hedge accounting of their responsibility to carry out professional work diligently and in accordance with the applicable technical standards. These results demonstrate our commitment to ensure the standards of the profession are upheld so that it can justifiably secure public confidence.”
In a statement after the FRC outcome, Paul Etherington, quality and professional affairs leader at GT, said the firm lamented the errors in Manchester Building Society’s financial statements that arose from hedge accounting. “We have co-operated fully throughout the Financial Reporting Council’s investigation and we are pleased that we have reached agreement to resolve it. As a firm we remain supportive of the individuals involved,” he said.