Forvis Mazars and top partner hit with £600,000 fine for audit failings
The Financial Reporting Council (FRC) has hit accountancy giant Forvis Mazars and a top partner at the firm, David Allen, with a combined £610,537 for audit failings relating to a retail firm listed on the London Stock Exchange’s main market.
The FRC said it has issued the fines following an investigation into both Forvis Mazars and Allen for failings in relation to its statutory audit of digital retail company, Studio Retail Group, for the end of the financial year 2021.
The retail firm, which was listed on the LSE’s main market at the time of the audit, went into administration in February 2022 – eight months after the audit report was signed off by the accountancy company – which led to losses for creditors and shareholders losing “the entirety of their investment.”
The FRC said Forvis Mazars has been fined £577,125, which has been reduced from £950,000 for “exceptional cooperation” and making early admissions to agree to a settlement.
Allen, who has over 20 years of audit experience, was hit with a £55,000 fine, reduced to £33,000 for the same reasons.
Justine Davidge, the FRC’s acting deputy executive counsel said “serious breaches and failings” in Forvis Mazars audit of Studio Retail Group.
Pooling profits following merger
Mazars and Forvis, two separate professional services firms, merged in June 2024 to launch a £3.9bn ($4.7bn) global network, making it the largest new entrant in global rankings in the market decades.
French-based Mazars and US-based Forvis established a two-firm network to be known as Forvis Mazars, whose global headquarters is now in Paris.
The firm’s chief executive, James Gilbey, told City PM in May that as a result of the merger, the firm can pool profits and capital into funding projects globally.
Forvis Mazars was contacted for comment.