The Financial Reporting Council (FRC) has commenced an investigation into the audit by Grant Thornton UK LLP of the financial statements of Interserve Plc for the years ended 31 December 2015, 2016 and 2017.
Last month the construction company, which has 45,000 UK staff, and 68,000 globally, entered administration.
The investigation will be conducted under the Audit Enforcement Procedure. The stages of the Audit Enforcement Procedure are:
- Initial case examination and decision to investigate
- Decision by executive counsel as to whether to issue a decision notice (a notice with the findings and recommended sanction);
- Referral to enforcement committee and decision by the enforcement committee whether to issue a decision notice; and
- Referral to a tribunal
- In order for a matter to be referred for investigation by the FRC’s executive counsel under the audit enforcement procedure, the FRC’s Conduct Committee is required to decide whether there is good reason to investigate an allegation in relation to a statutory auditor and/or a statutory audit firm.
A spokesperson for Grant Thornton UK LLP said: “I can confirm we have received correspondence from the Financial Reporting Council (FRC) informing us of its decision to commence an investigation, and we will of course fully cooperate with them in this matter.”
The news comes as the firm’s work with auditing the accounts of Patisserie Valerie – which collapsed in January – is also being scrutinised.