Accountancy firm RSM has revealed an internal accounting error which resulted in the firm overstating its profits by £3.8m.
The firm’s chief executive, finance director and chief operating officer resigned in December as a result of the error, according to a report by the Sunday Times.
Despite the hit to its profits, the firm reported a 6.7% increase in revenues to £335m during the period, as well as a profits of £9.1m compared with of loss of £113,000 reported a year prior, according to accounts filed with Companies House for the year to 31 March 2019.
It comes after Sports Direct appointed RSM as its new auditor in October last year, following the announcement that Grant Thornton was stepping down from the position on 13 August 2019.
At the time, Grant Thornton said “following a review of its client portfolio” it intends not to seek reappointment as the company’s auditors and will cease to hold office as auditors with effect from 11 September 2019.
Retail Sector has contacted RSM for comment.