Grant Thornton is investing £7m ($8.9m) over the coming year and has set out new measures to further strengthen audit as a specialism at the firm. Grant Thornton had been criticised for its role as auditor of the UK café chain Patisserie Valerie. The firm went into administration following the discovery of a £94m ($119m) hole in its accounts.

Grant Thornton said that governance is being strengthened with the establishment of a new audit quality board and that it will establish new centres of excellence in London and Birmingham will enhance its ability to deliver FTSE 350 audit work ‘if regulatory conditions allow’..

The measures form part of the Grant Thornton’s response to recent scrutiny of its audits of large listed companies, and wider efforts to prepare the business to compete for FTSE 350 audit work should changes in the market present a more level playing field for competition.

Grant Thornton UK LLP CEO Dave Dunckley said: “As individual firms and as a profession we are under scrutiny. We are responding by strengthening audit as a specialist practice area, one that delivers for all stakeholders.

“And we will continue to work with our clients and the regulator to go further. The independent review of our audit practice this autumn will be an important part of our continued efforts to improve.

“These changes are also an important part of enhancing our ability to deliver FTSE 350 work in future. Large public businesses and all their stakeholders depend on the choice and quality a genuinely competitive market creates. Grant Thornton will be ready to compete, but we will only re-enter the market if the regulatory and commercial conditions allow.”

The measures follow the recent appointment of Fiona Baldwin as head of audit at Grant Thornton UK LLP and the first head of audit to join the firm’s strategic leadership team. She said: “Audit plays an important part in the way business and society interact. The changes we’re announcing today enable us to better support our clients, and all stakeholders who rely on audit.”

Among the actions being taken are:

  • Creation of an Audit Quality Board with powers to hold the leadership of the firm to account if it believes audit quality is not receiving appropriate investment and that lessons from inspections are not being addressed. The Board will include Fiona Baldwin, and a respected, independent external audit expert.
  • Commissioning of an independent review of audit at Grant Thornton to take place in autumn 2019. The assessment will be led by a senior individual with no previous connection to the firm, and will scrutinise its approach to audit and make recommendations for further change and improvement.
  • Establishing new centres of excellence in London and Birmingham for the firm’s most complex audit work. These centres will become hubs for all major audit work and, if market conditions change, will make the firm’s participation in future FTSE 350 audit economically viable.
  • A commitment to invest £7m in people and technology at the firm over the coming year, including the creation of a new Audit Quality Academy. This commitment follows more than £60m invested in recent years throughout the firm’s network to better analyse data and implement regulatory changes.