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Johnston Carmichael resigns SNP audit to spend time with clients
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Johnston Carmichael severs ties with SNP

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Top 20 Scottish audit firm Johnston Carmichael has been caught up in the messy aftermath of Nicola Sturgeon’s resignation as first minister.

12th Apr 2023
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Following the arrest last week of former Scottish Nationalist Party (SNP) chief executive Peter Murrell, Johnston Carmichael revealed it had resigned as the party’s auditor. Public records show the firm has audited the party’s accounts going back as far as 2009. 

According to The Herald, new SNP leader Humza Yousaf told reporters this week that the firm informed the party of its decision “about October last year”, but the resignation was only made public after Murrell’s arrest.

As well as his executive role at the SNP, Murrell is married to former first minister Nicola Sturgeon. He resigned his position in March following an internal dispute over reported member numbers. She announced her intention to quit in February. 

Within days of Sturgeon handing over to Yousaf as first minister on 29 March, police investigating financial irregularities within the SNP arrested Murrell at their home in south Glasgow.

Fighting fund

The timing of Sturgeon and Murrell’s departures from their respective SNP roles within weeks of each other aroused considerable comment. Police interest in the party’s finances has been in the public domain for the past two years after questions were raised about the whereabouts of a £660,000 fighting fund raised to campaign for another independence referendum.

The party’s most recent accounts, published in June 2022 for the year ending 31 December 2021 show a deficit of £749,345 and confirm the auditor’s conclusion that the SNP remains viable as a going concern.

The figures do show an annual increase in campaigning costs on the previous year roughly equivalent to the size of the deficit. The financial review accompanying the accounts acknowledged that £253,335 had been drawn from the campaign funds, with the rest “earmarked” for further independence-related campaigning.

The audit report from Johnston Carmichael confirmed the accounts give a true and fair view of the party’s finances, based on an FRS 102 reporting framework. 

The auditor did highlight risks around the SNP’s “overall control environment” and how managers applied those controls, with heightened risks of fraud identified in related party transactions and manual journal entries. “Where the risks were considered to be higher, we performed procedures to address each identified risk,” the auditor wrote.

As a political party, however, the SNP is not covered by company law, but by the Political Parties, Elections and Referendums Act 2000. Under this regime, the auditor is only responsible for reporting to the National Treasurer of the Scottish National Party. The published information was restricted to the generalised comments circumscribing the auditor’s responsibility to uncover fraud.

String of acquisitions

Having audited the SNP accounts for at least the past 12 years, the independence issues for Johnston Carmichael don’t just concern national Scottish politics. The SNP’s rise to power in 2011 has been accompanied by an equally spectacular ascent for Johnston Carmichael. A string of acquisitions during this era saw the firm more than double its size to 850 staff. From a regional practice specialising in agriculture and owner-managed business around Moray and Aberdeenshire in the North East, it has become a national powerhouse with offices across Scotland and numerous public-interest entity audit clients. 

As Johnston Carmichael has grown, its position in relation to public-sector work has become more ambiguous. Unlike the Big Four, it does not show up in Freedom of Information requests as the recipient of consultancy fees awarded by the Scottish government. But the firm’s involvement with quasi-public bodies and arm’s length contracts is evident.

The Johnston Carmichael website details its participation in a public-private energy viability scheme funded by government assessing whether Hebridean wind farms could produce hydrogen to power ferries operated by Caledonian Maritime Assets Ltd.

In 2021 Johnston Carmichael joined the steering group behind the Operation Cromarty Firth freeport campaign, which was rewarded with millions in funding from the UK and Scottish governments to create the Inverness and Cromarty Firth Green Freeport.

One further feature of Johnston Carmichael’s growth was its entry into the Moore Global international network in 2021. As a player on the global stage, senior managers might well have had reasons to reconsider the merits of continuing such a long-running audit engagement with a governing party caught up in financial controversy.

Replies (12)

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By Hugo Fair
12th Apr 2023 19:13

Keep watching this space (and reading P Eye) ... but have plenty of nose-pegs handy!

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Replying to Hugo Fair:
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By Open all hours
13th Apr 2023 16:12

Looking forward to continuing on page 94 (and following).

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By Ruddles
13th Apr 2023 12:38

"Murrell is married to former first minister Nicola Sturgeon"

More accurate to say that Murrell shares a house with former first minister Nicola Sturgeon. Folks may draw their own conclusions from that statement.

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Replying to Ruddles:
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By GDavidson
13th Apr 2023 14:04

Heavens! They have got divorced already?

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Replying to Ruddles:
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By GDavidson
13th Apr 2023 14:04

Why?

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Replying to GDavidson:
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By Hugo Fair
13th Apr 2023 15:25

I suspect Ruddles is stirring the internet tittle-tattle (to be found if you search on Google under 'sturgeon sexuality') - but it could be a more topical story that's bubbling under in the news headlines (something about a campervan and SNP funds)?

There seem to be a lot of fishy (smelling) tales swirling around up there!

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Replying to Hugo Fair:
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By Open all hours
13th Apr 2023 16:13

Usually trout that gets tickled(?). Not that I’m inferring that any Sturgeon could be mistaken for an old one of those you understand.

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Replying to GDavidson:
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By Dr Fauci
16th Apr 2023 00:43

Allegedly she prefers carpet to pole.

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By Ian_mcdonald
14th Apr 2023 10:08

Sturgeon and Salmon(d) always sounded fishy to me.

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By mumpin
14th Apr 2023 10:15

I believe DJKL got into bed with Johnston Carmichael.
I resisted their advances!

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Replying to mumpin:
paddle steamer
By DJKL
17th Apr 2023 14:23

We still use them re tax planning.

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By carnmores
14th Apr 2023 15:18

Apparently they actually resigned last October !!

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