December 2, 2020

Grant Thornton May Have Hosed Fire Engine Company Audit

It appears the Financial Reporting Council — the UK's answer to audit cops — is looking into a "minor" matter involving the company that owns London's fire trucks and former auditor Grant Thornton. The investigation is specifically aimed at financial statements ended March 31 2008 – March 31 2010 and "the preparation of financial information leading up to the identification of the restatement reported in the financial statements for the period ended 30 September 2011."

According to economia:

In April 2012 AssetCo was forced to revise its accounts. A “serious failure of management and internal financial controls” led to a significant overstatement of profits and assets.

As a result, AssetCo was forced to make prior period adjustments for 2010 that wiped more than £235m off its balance sheet.

It has also had to restructure and refinance the business to ring-fence its operations in the Middle East from the problems of the UK arm.

In 2011, the board of directors – including the chairman, chief executive and two finance directors – all left and Grant Thornton resigned as company auditors. It was replaced by PWC.

The FRC says it was a third party who alerted the FRC to issues.

It's probably all NBD and just one simple misunderstanding, right? Right. I mean we are only talking about "the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud" here. Totes easy to miss during the audit process, no audit is perfect!

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