November 29, 2021

Boo-hoo: A Certain U.K. Online Fashion Retailer Might Have a Hard Time Finding a New Auditor (UPDATE)

[Updated on Dec. 21 with additional information.]

Something called PKF Littlejohn will replace PwC as auditor of scandal-ridden U.K. online fashion retailer Boohoo.

The Guardian reported earlier today:

The online fashion retailer Boohoo has hired a new auditor after the resignation of the “big four” accountancy firm PwC amid accusations that workers’ health and rights had been put at risk and some were underpaid.

Boohoo, which is controlled by its billionaire co-founder Mahmud Kamani, announced on Monday that it had appointed PKF Littlejohn, a small UK accountancy firm, as its auditor with immediate effect.

PwC auditors had signed off on the retailer’s accounts for the past seven years, but cut its ties in October after an independent report uncovered dangerous working conditions and the underpayment of staff.

In a brief statement, Boohoo said: “The board would like to thank PwC for its services and support provided to the group over the past seven years.”

PKF Littlejohn is the 10th largest firm in the U.K. in terms of revenue, generating £140 million in 2019.

Boohoo hires new auditor after PwC quit amid governance allegations [The Guardian]

[This article was originally posted on Oct. 20, 2020.]

Being accused of treating its garment workers like complete garbage has resulted in U.K. online fashion retailer Boohoo searching for a new audit firm after PwC recently resigned. And according to The Telegraph, none of the other largest audit firms in Britain wants to touch this engagement—except for maybe one:

Deloitte, KPMG, BDO and Grant Thornton have all decided not to bid for a contract to oversee Boohoo’s books, sources said. EY is the only top six firm still in the running.

Shares in Boohoo closed almost a fifth lower at 254p after it announced a tender process to replace PwC, which is resigning amid reputational concerns.

An investigation commissioned by Boohoo found last month that bosses at the company knew workers were being mistreated in its Leicester supply chain months before a “sweatshop” scandal exploded in the media.

The investigation found no evidence Boohoo had committed any crimes, but said the company failed to take action fast enough and warned that its supply chain is likely riddled with bad behaviour.

You would think EY would have had its fill of being associated with companies that have been rocked by scandals, but maybe it has some sort of fetish for auditing dirty companies. I dunno.

If not EY, it’s pretty slim pickings for Boohoo. Possibly RSM? But if I had to guess, it’ll probably be Mazars. It likes picking up the Big 4’s scraps.

Four out of five top auditors snub Boohoo after fast fashion scandal [The Telegraph]

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