Source: bbc.co.uk 24 April 2017
Accountancy firm Grant Thornton (GT), has been fined £2.3m and severely reprimanded by the Financial Reporting Council (FRC) over failings in its audit of a company called AssetCo.
The regulator said GT, and its partner Robert Napper, had admitted a “lack of professional competence and due care”. This had allowed AssetCo to falsely inflate its value and its share price.
The FRC said that the auditors had been deceived by the management of AssetCo, a fire engine manufacturer once owned by British Gas. But the auditors had been at fault by failing to employ the required level of “professional scepticism”.
The FRC also said that the failings of GT, and the now-retired Mr Napper, in the audit of AssetCo’s accounts were not deliberate or reckless and did not amount to dishonesty. Even so, the AssetCo audits were so poor that the accountants’ behaviour “fell significantly short of the standards reasonable expected of them”, and showed a “widespread lack of professional competence and due care in the performance of the audits.”