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| Patisserie Valerie auditor faces probe over alleged fraud | Patisserie Valerie auditor faces probe over alleged fraud |
| (about 2 hours later) | |
| Accountancy firm Grant Thornton is being investigated over its auditing of Patisserie Holdings. | Accountancy firm Grant Thornton is being investigated over its auditing of Patisserie Holdings. |
| The Financial Reporting Council (FRC) said it is investigating audits by Grant Thornton for three years - 2015, 2016 and 2017. | The Financial Reporting Council (FRC) said it is investigating audits by Grant Thornton for three years - 2015, 2016 and 2017. |
| Last month Chris Marsh, former finance director at the cafe chain Patisserie Valerie, was arrested after accounting irregularities were uncovered. | Last month Chris Marsh, former finance director at the cafe chain Patisserie Valerie, was arrested after accounting irregularities were uncovered. |
| Mr Marsh is also being investigated by the FRC. | Mr Marsh is also being investigated by the FRC. |
| Mr Marsh is an accountant and member of the accountancy body the ICAEW. | Mr Marsh is an accountant and member of the accountancy body the ICAEW. |
| The FRC said that under its rules Mr Marsh would be investigated for misconduct while the investigation into Grant Thornton would cover breaches of its rules. | The FRC said that under its rules Mr Marsh would be investigated for misconduct while the investigation into Grant Thornton would cover breaches of its rules. |
| A spokesman for Grant Thornton confirmed it had received a letter from the FRC about the decision to start an investigation. "We will, of course, fully cooperate in this matter," the spokesman said. | A spokesman for Grant Thornton confirmed it had received a letter from the FRC about the decision to start an investigation. "We will, of course, fully cooperate in this matter," the spokesman said. |
| It is the first time that the focus had been put on three years of the company's accounts. | It is the first time that the focus had been put on three years of the company's accounts. |
| The company has previously said it is trying to understand why executive share options relating to 2015 and 2016 were not appropriately disclosed and accounted for in its financial statements. | |
| In October the Serious Fraud Office said it had opened an investigation into an individual, assumed to be Mr Marsh. | In October the Serious Fraud Office said it had opened an investigation into an individual, assumed to be Mr Marsh. |
| Mr Marsh, who has not been charged, was initially suspended and resigned shortly afterwards. | Mr Marsh, who has not been charged, was initially suspended and resigned shortly afterwards. |
| Patisserie Holdings was saved from collapse when Luke Johnson, who owns 37% of the company, offered up to £20m in loans to the struggling chain. | Patisserie Holdings was saved from collapse when Luke Johnson, who owns 37% of the company, offered up to £20m in loans to the struggling chain. |
| Shareholders in the 206-store chain approved the rescue plan earlier this month despite complaining about the terms being offered to them. | Shareholders in the 206-store chain approved the rescue plan earlier this month despite complaining about the terms being offered to them. |
| Last week, Paul May, the chief executive of the company, which also owns Druckers, Philpotts, Baker & Spice and Flour Power City, was replaced by Stephen Francis. | Last week, Paul May, the chief executive of the company, which also owns Druckers, Philpotts, Baker & Spice and Flour Power City, was replaced by Stephen Francis. |
| Industry probe | Industry probe |
| The market for auditing is currently being scrutinised by the Competition and Markets Authority. | The market for auditing is currently being scrutinised by the Competition and Markets Authority. |
| It wants to establish if there is a lack of competition among the big four accountancy firms, which could be hurting the quality of audits. | It wants to establish if there is a lack of competition among the big four accountancy firms, which could be hurting the quality of audits. |
| Grant Thornton is a rival to the big four auditors of Deloitte, KPMG, EY and PwC. | Grant Thornton is a rival to the big four auditors of Deloitte, KPMG, EY and PwC. |
| Grant Thornton was recently fined £4m after four of its senior employees admitted misconduct in handling the financial audits of Vimto-maker Nichols and the University of Salford. | Grant Thornton was recently fined £4m after four of its senior employees admitted misconduct in handling the financial audits of Vimto-maker Nichols and the University of Salford. |