Lookers expands accounting probe

Lookers and its auditor, Deloitte, have announced they are extending the scope of its 2019 audit. The move follows a review of Grant Thornton’s final report on 3 August.

It comes as Lookers confirmed that the publication of its 2019 financial statements will “no longer be possible” by the end of August.

The second-hand car dealer had previously suspended its July results after it was found that the group had overstated profits by £19m over a period of several years. 

The hole in its accounts was discovered through a Grant Thornton investigation, which identified “potentially fraudulent transitions” in its books earlier this year. 

The newly-announced extended probe has identified further work on its corporate leasing division and vehicle financing arrangements that will now be investigated.

Its 2018 and earlier balance sheets will also be examined and reviewed in order to “ensure correct identification and allocation of adjustments”. 

In addition, further work is now ongoing to finalise the 2019 accounts. Deloitte will resign as its auditor once the group’s full-year results are released. 

For now, Lookers is working alongside Deloitte and its external accounting advisors to assess the impact on its 2019 financial statements, including a restatement of prior year accounts.

Its board “remains committed to ensuring the issues identified in the report are fully considered and addressed”, however, and the group will continue to work with Deloitte to finalise the 2019 audit “as quickly as possible”.

According to the group, the likely magnitude of the potential restatements “will not prevent 2019 from remaining profitable”.