Grant Thornton hit with £3m fine for Vimto audit failures
Accountancy firm Grant Thornton has been fined £3m for misconduct in the auditing of the owner of soft drink Vimto and the University of Salford.
Regulator the Financial Reporting Council (FRC) fined Grant Thornton and four of its senior auditors for what it said were “widespread and serious inadequacies”.
The fines relate to the audits of Vimto owner Nichols and the University of Salford for the years 2010, 2011, 2012 and 2013, although there was no suggestion of wrongdoing from either party.
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A former senior partner in Grant Thornton, Eric Healey, joined the audit committees of Nichols and the university, which at the time were audit clients of the firm.
The FRC said: “This created serious familiarity and self-interest threats and resulted in the loss of independence in respect of eight audits over the course of four years.”
It also revealed “widespread and serious inadequacies” in the control environment in Grant Thornton’s Manchester office as well as “firm-wide deficiencies in policies and procedures” relating to retiring partners.
Healey admitted his conduct was reckless and was fined £200,000 (discounted for settlement to £150,000) and will be excluded from the Institute of Chartered Accountants in England and Wales (ICAEW) for a recommended period of five years.
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Senior auditor Kevin Engel received a severe reprimand and a fine of £100,000 (discounted for settlement to £75,000) and senior auditors David Barnes and Joanne Kearns were given reprimands and fines of £70,000 (discounted for settlement to £52,500) and £60,000 (discounted for settlement to £45,000) respectively.
A spokesperson for Grant Thornton UK said: “It is regrettable that we fell short of the standards expected of us on this occasion. As we have since made significant investments in our people and processes and remain committed to continuous improvement in this regard, we are confident that such a situation should not arise in the future.”