Save content
Have you found this content useful? Use the button above to save it to your profile.
Grant Thornton offices | AccountingWEB | Grant Thornton hit with £50k audit sanction
creativecommons_grantthornton_raysonho

Grant Thornton hit with £50k audit sanction

by

Grant Thornton has accepted a £50,000 sanction on the back of an inspection by the Financial Reporting Council into its audit of a local authority’s pension fund.

8th Apr 2024
Save content
Have you found this content useful? Use the button above to save it to your profile.

Grant Thornton has been hit with a £50,000 penalty – adjusted to £40,000 for co-operation – in relation to its audit of a local authority’s pension fund.

The decision follows an inspection by the Financial Reporting Council (FRC) audit quality review (AQR) team, with the FRC’s enforcement committee concluding that the firm failed to comply with the regulatory framework for auditing.

Failures in the reviewed audit

The committee found failures in the reviewed audit for the year to 31 March 2021, which it said represented a “significant departure from the standards expected of a registered auditor and had the potential to affect the public, employees, pensioners or creditors”.

These included, according to the FRC, two uncorrected material errors, which appeared in the version of the pension fund’s audited financial statements that was included in the local authority’s annual report, with those same errors not appearing in the pension fund’s own financial statements.

There was also “insufficient audit evidence obtained that the value of investments was materially accurate”.

Sanction necessary

The committee considered it necessary to impose a sanction to ensure that Grant Thornton’s local audit functions are “undertaken, supervised and managed effectively”.

A notice of proposed sanction proposing a regulatory penalty of £50,000 has been issued, adjusted by a discount of 20% for “co-operation and other mitigating factors” to £40,000. 

The sanction has been accepted by Grant Thornton.

“In addition, the committee has accepted written undertakings proposed by Grant Thornton UK LLP, and the FRC will monitor compliance with the undertakings,” said the regulator.

Remedial steps

“The committee acknowledges that Grant Thornton UK LLP provided cooperation, including at an early stage, took appropriate remedial steps promptly once the failing was identified, and demonstrated contrition.

“There was also no evidence to support financial gain or benefit from the failure.”

A spokesperson for Grant Thornton said: “We note the findings of the regulator’s investigation, with which we have cooperated throughout, and regret the errors identified.

“As a leading provider of audit and related assurance services to the public sector, we remain committed to high-quality work and have taken steps to further improve this.”

Replies (8)

Please login or register to join the discussion.

avatar
By JustAnotherUser
08th Apr 2024 12:06

pocket change

Thanks (2)
Replying to JustAnotherUser:
avatar
By Paul Crowley
08th Apr 2024 19:09

Just a normal admin cost on the few that get looked at.

Thanks (3)
avatar
By FactChecker
08th Apr 2024 22:31

It's the missing detail that would at least be interesting ... the fine being, as the others have said, just pocket change / an admin cost (lost amongst the expense claims no doubt)!

BUT "two uncorrected material errors, which appeared in the version of the pension fund’s audited financial statements that was included in the local authority’s annual report, with those same errors not appearing in the pension fund’s own financial statements"?!?

So the audit has managed to *introduce* errors, not merely failed to identify pre-existing ones?

Thanks (4)
Replying to FactChecker:
avatar
By Paul Crowley
08th Apr 2024 23:14

Agree. But there may have been timing differences.

Thanks (0)
avatar
By Paul Crowley
08th Apr 2024 23:12

Last year there was the suggestion of a big four annual totaliser. Too late to start one this year?

Thanks (2)
Replying to Paul Crowley:
avatar
By JustAnotherUser
09th Apr 2024 08:21

not sure of how many sources there is but on these two links for...
2023 Enforcement Outcomes https://www.frc.org.uk/library/enforcement/enforcement-cases/outcomes/
and
2023 Enforcement Cases
https://www.frc.org.uk/library/enforcement/enforcement-cases/

KPMG 9
PwC 5
Ernst and Young (EY) 3
Accountant 2
Deloitte 1
Shipleys 1

Thanks (0)
avatar
By cbp99
09th Apr 2024 09:49

Was there no 'financial gain or benefit from the failure' in the time/cost saving of not doing the job properly?

Thanks (1)
avatar
By HL86
10th Apr 2024 07:14

With all the talk of getting accountants and advisors to sign up for a new regulatory body to manage us all etc, I do wonder how the big 4 will do when these things come out.... all a bit pointless really if it only applies to 1 man bands and small practices.

Thanks (0)