Audit

FRP seeks legal action over GT audit of Patisserie Valerie

Accountancy firm Grant Thornton is facing potential legal action over its handling of embattled café chain Patisserie Valerie’s accounts, reports have claimed.

According to the Sunday Times, liquidator FRP Advisory has reportedly hired law firm Mishcon de Reya to explore a potential claim against Grant Thornton, which, prior to the chain’s collapse, had audited the company’s accounts for almost 12 years.

It comes as a report commissioned by FRP from accountancy and tax advisory firm, Smith and Williamson, suggested there were “significant failings” in the group’s audit of the bakery chain.

Patisserie Valerie’s consolidated accounts were overstated by £94m according to figures released by audit firm KPMG in March 2019.

KPMG was originally appointed as administrator for the company which collapsed after fraudulent activities were discovered within its accounts, but was later replaced by FRP.  

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Last year, KPMG released a statement saying that the bakery chain needed to consider whether there may be sufficient grounds to establish potential legal claims against a number of parties, including Grant Thornton. 

Additionally, in November 2018 Grant Thornton was put under investigation by the Financial Reporting Council for its handling of Patisserie Valerie’s accounts for the years ended 30 September 2015, 2016 and 2017.

“Severe misreporting” of Patisserie Valerie’s accounts was first suspected when forensic accountants looked into the company’s figures in January and said the fraudulent activity discovered in October was worse than initially thought.

Accountancy Today has contacted Grant Thornton and FRP for comment.

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