Grant Thornton UK Faces £40,000 Penalty for Audit Oversight Lapses

Grant Thornton UK finds itself in the regulatory spotlight as the Financial Reporting Council (FRC) imposes a penalty of £40,000, citing procedural failures in the firm's audit of a local authority’s pension fund. The FRC disclosed on Monday that it had opted to reduce the initial penalty from £50,000, acknowledging the firm's cooperation and remedial actions in response to identified deficiencies.

The audit under scrutiny pertains to the financial year ending March 31, 2021, though the FRC has refrained from publicly naming the specific local authority involved. Shedding light on the FRC's concerns, it was revealed that the audit uncovered "two uncorrected material errors" within the audited financial statements of the pension fund, as included in the annual report of the respective local authority. Additionally, the regulator noted a lack of sufficient evidence substantiating the accuracy of investment valuations.

The FRC underscored the importance of its enforcement action, emphasizing the necessity of effective execution, supervision, and management of local audit functions within Grant Thornton UK. In response to the penalty, a spokesperson for Grant Thornton UK expressed regret over the identified errors, stating, "We note the findings of the regulator’s investigation, with which we have cooperated throughout, and regret the errors identified." The spokesperson reiterated the firm's unwavering commitment to delivering high-quality audit and assurance services to the public sector and emphasized ongoing efforts to bolster performance standards.

By fLEXI tEAM