Grant Thornton have been fined £2.3m for failures in its audits carried out between 2015 and 2017 on Patisserie Valerie.

Patisserie Valerie entered into administration and concerns over the company’s accounting function.

The Financial Reporting Council advised that Grant Thornton failed to ‘question information provided by management,’ and had ‘missed red flags’ after failing to follow audit rules ‘evidencing a serious lack of competence in conducting the audit work.’. The firm must now report annually, documenting its improvements.

This fine follows a previous £650,000 fine in 2016 after it was identified that a series of errors were in the audit of an unnamed listed company.

David Newstead, who carried out the audits, was also fine £150,000, later adjusted to £87,750 and banned from carrying our audits for three years.

This case highlights the potential risks for auditors if their clients subsequently enter into insolvency proceedings.

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