• Register
Return to: Home > News > Financial Results > MPs question PRA’s scrutiny of Grant Thornton

MPs question PRA’s scrutiny of Grant Thornton

The chairs of three UK Government select committees have written to the Bank of England’s (BoE) Prudential Regulation Authority (PRA), questioning its concerns around Goldman Sachs potentially hiring Grant Thornton as its next auditor.

The three chairs are: Frank Field, Work and Pensions Committee, Rachel Reeves, Business, Energy and Industrial Strategy Committtee, and Nicky Morgan, Treasury Committee.

In an article published by The Times on 10 July, the PRA was reported to have flagged concerns about Grant Thornton potentially not having the ‘required skill, resources and experience to perform its function under the regulatory system’ to audit the investment bank.

The PRA was established following the financial crisis to regulate and supervise the banking sector.

Morgan, Field and Reeves, whose select committees have investigated the collapse of British Home Stores (BHS) and Carillion, wrote to the PRA’s chief executive Sam Woods to query the PRA’s supposed actions by noting that ‘nearly all the banks that failed back then [during the financial crisis] were being audited by members of the Big Four’.

The letter also addressed the issue of Goldman Sachs lack of auditor choice. EY, KPMG and Deloitte are all said to be providing the company with non-audit services which would leave PwC as the only Big Four firm not to be too conflicted.

However PwC is the Goldman Sachs incumbent auditor and due to EU regulations the company is required to remove them by 2022.

Unless Goldman Sachs severs ties with at least one the Big four firms providing non-audit services, the company will have no other option but to look to a firm outside of the Big Four.

Earlier this year, Grant Thornton announced that it would no longer compete to audit FTSE 350 companies as the firm felt that it could not compete with the Big Four in this market.

Morgan, Field and Reeves closed their letter commenting: “If the PRA were to block Goldman Sachs from appointing grant Thornton then you are introducing your own form of Big Four only clauses. We would very much welcome confirmation from the PRA that this is not your intention.”

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

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    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.