Originally published by Grant Thornton UK LLP, 9 May 2016
Reinsurance is a common connected-party transaction for groups operating in the insurance sector. This 2016 article from Grant Thornton discusses a key change to the OECD Transfer Pricing Guidelines arising from BEPS and how it impacts the transfer pricing of intra-group reinsurance.
The article concludes that “for many groups there is unlikely to be a sea change in the transfer pricing analysis performed, but there will be a greater level of documentation and evidence required to support the nature of the analysis performed.”
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.”