Accounting watchdog launches Interserve audit probe

11 April 2019 | By Neil Gerrard

Accounting watchdog the Financial Reporting Council (FRC) has launched an investigation into the audit of Interserve’s financial statements in three separate years, it announced this morning.

The FRC is examining Grant Thornton’s audit of Interserve’s statements for the years ended 31 December 2015, 2016 and 2017.

It did not indicate what has triggered the investigation, which it aims to complete within two years.

The probe will be conducted under the Audit Enforcement Procedure. Once concluded, the FRC’s executive counsel will decide whether or not to issue a Decision Notice, which sets out the investigation’s findings and a recommended sanction.

Interserve directed requests for comment to Grant Thornton. CM has contacted Grant Thornton comment.

The FRC is already running two other investigations into Grant Thornton's audits of cafe chain Patisserie Valerie and Sports Direct Internartional.

Meanwhile it is also conducting an investigation into Carillion’s financial statements. Initially, it said it would examine KPMG’s audit of the financial statements for the years ended 31 December 2014, 2015 and 2016 before extending it to 2013 as well. It is also investigating the conduct of two former Carillion finance directors, Richard Adam and Zafar Khan.

Interserve entered a pre-pack administration last month overseen by accountancy firm EY. The group was sold to a newly incorporated company controlled by its lenders after the company failed to agree a deleveraging plan with its shareholders.

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