Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

UK accountancy Grant Thornton fined over Patisserie Valerie chain audit

Stock MarketsSep 27, 2021 04:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: A sign is seen outside a branch of Patisserie Valerie in London, Britain, October 10, 2018. REUTERS/Simon Dawson/File Photo 2/2

LONDON (Reuters) -Accountancy firm Grant Thornton has been fined for its audit of Patisserie Valerie, the British cafe chain that collapsed in 2018, throwing 900 people out of a job and triggering a separate fraud investigation into accounting irregularities.

The Financial Reporting Council (FRC) said it was fining Grant Thornton 4 million pounds ($5.47 million) but would cut it to 2.34 million pounds due to mitigating factors, as well as imposing non-financial measures to improve its procedures.

The FRC said Grant Thornton's audits during 2015, 2016 and 2017 missed "red flags" and failed to stand back and challenge the management of the cafe chain, whose collapse FRC said led to the closure of 70 stores and more than 900 job losses.

David Newstead, Grant Thornton's audit partner for Patisserie Valerie, was to be fined 150,000 pounds, falling to 87,750 pounds, due to mitigating factors.

The fines are low compared with record or near record double-digit sums that bigger accounting rivals have paid out in recent years following other corporate collapses as the watchdog sought to fend off criticisms of being too soft.

The FRC said it took Grant Thornton's "size, financial resources and financial strength" into account in determining the level of sanctions. The accountants provided an "exceptional level of co-operation" with the investigation, it said.

Grant Thornton had a net income of 471 million pounds in 2020, with an underlying trading profit of 72 million pounds, up 14% on the prior year.

"We regret the quality  of our work  fell short of  what was expected of us  in this instance," Grant Thornton said.

"Since the period in question, we have invested significantly in our audit practice to  better ensure  consistent  quality and have started to see the material outcome of this investment," it said in a statement.

Britain's Serious Fraud Office is investigating Patisserie Valerie, having arrested former finance director Chris Marsh and several others.

Grant Thornton said it would continue to rigorously defend the civil claim brought by Patisserie Valerie's liquidators, which "ignores the board's and management's own failings in detecting the sustained and collusive fraud which took place".

"We recognise that there were shortcomings in our audit work; however, our work did not cause the failure of the business," Grant Thornton said. 

($1 = 0.7311 pounds)

UK accountancy Grant Thornton fined over Patisserie Valerie chain audit

Related Articles

PayPal in $45 billion bid for Pinterest -sources
PayPal in $45 billion bid for Pinterest -sources By Reuters - Oct 20, 2021 3

By Greg Roumeliotis and Arriana McLymore (Reuters) - PayPal Holdings Inc (NASDAQ:PYPL) has offered to buy digital pinboard site Pinterest (NYSE:PINS) Inc for $45 billion, people...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email