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FRC hits Grant Thornton with stiff fine

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15th Jul 2015
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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.

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By carnmores
15th Jul 2015 20:05

they seem to be under pressure
Lets see what finally happens with Tchenguiz brother

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By AndrewV12
16th Jul 2015 08:24

Hedge accounting .......its complicated

Grant Thornton have made a shoddy job of the Auditing of Manchester Building Society.

 

However in defence of GT interest rate swaps, hedge accounting is very complicated and not many understand it, I do not, and not many accountants do, no matter what they say. 

 

I do not know much about the Accounts of Building Society's but should they be using hedge accounting and interest rate swaps, or do they use it as a form of insurance.  

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