• Register
Return to: Home > News > Financial Results > FRC sanctions Grant Thornton

FRC sanctions Grant Thornton

The Financial Reporting Council (FRC) announced sanctions against Grant Thornton UK LLP to the tune of £650,000 and one of its Audit Engagement Partners in relation to the statutory audit of the 2016 financial statements of a publicly listed company 

The sanctions are:

  • A fine of £650,000 for Grant Thornton (discounted for admissions and early disposal to £422,500),
  • A fine of £20,000 for the Audit Engagement Partner (discounted for admissions and early disposal to £13,000); and
  • A declaration that the 2016 Audit report signed on behalf of Grant Thornton did not satisfy certain Relevant Requirements (summarised below).

Its been ruled that Grant Thornton and the Audit Engagement Partner will also pay all of Executive Counsel’s costs of the investigation. The admitted breaches of Relevant Requirements relate to the audit work carried out on the Company’s principal assets, and an area identified as a significant risk.  The work done on the sampling of those assets was inadequate and failed to select an audit sample that was sufficient to reduce the sampling risk to an acceptably low level.

It was found that the audit team also placed undue reliance on the Company’s externally appointed experts in the valuation of the assets and did not appropriately consider the use of an auditor’s expert. The breaches by the audit team led to a failure to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions about the valuation of the assets.  There were also failures to exercise sufficient professional scepticism and to prepare adequate audit documentation.  However, none of the breaches of Relevant Requirements were either intentional, dishonest, deliberate or reckless.

Notwithstanding the breaches, the Final Decision Notice issued on 5 November 2019 does not question the truth or fairness of the Company’s 2016 financial statements, which have not been subject to any restatement.  Executive Counsel notes that the Audit Engagement Partner had a hitherto unblemished disciplinary record.  Executive Counsel further acknowledges the co-operation provided by Grant Thornton and the Audit Engagement Partner during the course of the investigation. 

Grant Thornton has also taken remedial action including the provision of appropriate training on the use of experts and the challenge of management estimates to all audit staff to prevent reoccurrence of breaches.

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more


    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.