Grant Thornton is set to “rigorously defend” legal action launched by the liquidators of Patisserie Valerie over its role as auditor of the chain, which collapsed after a £40m hole was discovered in its accounts last year.
FRP Advisory has now issued a claim for damages against Grant Thornton, as the auditor “awaits the findings” of a regulatory investigation into its role in the chain’s collapse. According to The Telegraph, FRP was said to have commissioned its own report into Grant Thornton’s audit of Patisserie Valerie’s accounts.
Patisserie Valerie first collapsed into administration last January, four months after “fraudulent” activities were discovered in its accounts.
A spokesperson for the joint liquidators told Accountancy Today: “We can confirm that the joint liquidators of companies within the Patisserie Valerie Group have issued a claim for damages against Grant Thornton in respect of their negligent audits of the group companies’ financial statements for the financial periods 30 September 2014 to September 2017 inclusive. We will not be commenting further at this time.”
A spokesperson for Grant Thornton said: “We are aware that a claim has been filed, but it has not been served. We will, however, be rigorously defending the claim once we receive it.”
Reports that FRP Advisory hired law firm Mishcon de Reya to explore a potential claim against Grant Thornton emerged earlier this year. Prior to the chain’s collapse, Grant Thornton had audited the company’s accounts for almost 12 years.
News of the potential legal action followed a report commissioned by FRP from accountancy and tax advisory firm, Smith and Williamson, that 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.
