The UK Financial Reporting Council (FRC) has launched an investigation into Sports Direct’s auditor, Grant Thornton UK, over a transaction between Sports Direct, owned by Mike Ashley, and Barlin Delivery Limited owned by Ashley’s brother, John, which was not disclosed as a related party in the financial statement.
The UK FRC said in a statement: “The Financial Reporting Council (FRC) has commenced investigations under the Accountancy Scheme and the Audit Enforcement Procedure in relation to the preparation, approval and audit of the financial statements of Sports Direct International plc (“Sports Direct”) for the 52 week period ended 24 April 2016. These decisions follow reports of an arrangement between Sports Direct and Barlin Delivery Limited which was not disclosed as a related party in the company’s financial statements.”
Sue Almond, head of assurance, Grant Thornton UK said: “Grant Thornton is committed to delivering the best possible assurance services to clients and continually enhancing the quality of our audits. The FRC and Grant Thornton have a common interest in promoting good corporate governance and reporting standards. We shall of course be co-operating fully with their investigation.”