Raymond Doherty 24 Jun 2019 12:13pm

Grant Thornton announces audit overhaul

The mid-tier firm has come in for criticism over its audit work on Patisserie Valerie

The changes include a new Audit Quality Board, a £7m investment in people and technology, an independent review of audit at the firm, and new centres of excellence in London and Birmingham.

Grant Thornton, along with the Big Four and the other major UK auditors, has faced significant scrutiny recently after a raft of reviews of the UK audit market was launched in response to the collapse of Carillion.

The firm is under investigation by the Financial Reporting Council for its audit of Patisserie Valerie following the discovery of a £40m black hole in the caf chains accounts.

Over the weekend a number of individuals were arrested by the Serious Fraud Office in connection to its probe into alleged fraud at the collapsed chain.

Grant Thornton UK 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 independent review will be carried out later this year by a senior individual with no previous connection to the firm and will make recommendations for further change and improvement.

The new Audit Quality Board will have power to hold firm leadership to account and will include new head of audit Fiona Baldwin.

The proposed centres of excellence are for the most complex audit work. They aim to make the firms participation in future FTSE 350 audit economically viable

Dunkley created headlines last year when he told a committee of MPs that it is not the auditors role to uncover fraud.

Earlier this month PwC announced that it is going to spend £30m a year to overhaul its audit business and split the practice in.