Grant Thornton fined £1.95m for Conviviality audit flaws
Grant Thornton was fined £1.95m by the Financial Reporting Council this week and reprimanded along with two of its Conviviality audit team for technical and ethical failures in the audit of the failed drinks group.
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As far as I could see she was ordered by Mr E to make that timesheet change, so you can excuse her to a large extent there.
A most unedifying saga.
I said "to a large extent" and you must be pretty dumb not to understand the context there (if you read the judgment - which you may not have done).
I accept your apology nonetheless.
Arcadia below has obviously read the judgment & understands the context and I agree with him/her.
I really feel for Ms Toy being caught out by the 'gotcha' approach to regulation when the 'crime' and the potential risk was nugatory. As fully set out in the report it was planned she would be the audit manager on this audit, but the possibility came up she would be seconded to the client to prepare their accounts. During the few days that elapsed while this was negotiated and the ethical partner was consulted she spent 4.5 hours helping the audit director draft the audit plan. Is the FRC seriously saying this compromised Grant Thornton's independence as auditor? Yes, the partner then asked her to make sure she had not spent any time on the audit, and yes, she tried to remove the entry. They wouldn't need to go into these contortions if they thought that there was any kind of proportionate approach to what is an extremely minor matter.
What the FRC have now signalled is that common sense goes out of the window and that minor infringements of no consequence are going to be punished by naming and shaming. I completely accept that there were many other findings against GT of a serious nature, but to tack this one on the end against an employee with no influence over the conduct of the audit (which is supposed to be the point isn't it) or the policies or conduct of GT is just vicious.
Auditing accounts largely created by a grant thornton employee (she didnt join conviviality?) was the problem?