Would you believe it – accountants are making the headlines!

 

There are so many big things happening at home and around the world this month.  For example you would have to be in hibernation to miss the mega debate on Brexit but then there were the California wildfires which destroyed ironically a place called Paradise where 83 died, 500 remain missing and 10,000 homes burned.  The month draws to a conclusion with the sea clash between Russia and Ukraine when Russian coastguard ships opened fire on two Ukrainian gunboats and a tug boat and the cauldron of tension between the two rapidly increased to Ukraine warning of a full-scale war with Russia.

We have also been told that Grenfell Tower fire was probably caused by faulty wiring inside a Hotpoint fridge freezer; David Cameron is welcomed to China where he is setting up a private equity fund; one in six pints of milk get thrown away unused; and the hike in tuition fees and has raised the debate on whether getting a university degree still delivers on the investment required.

Incredibly while all this is taking place Prince Charles makes a speech and tells us that “Accountants are best placed to provide sustainable business solutions to companies.”  This is what he told an audience of business leaders at the annual summit forum for Accounting for Sustainability Project (A4S).

That is quite a remarkable jaw dropping statement in the light of what has been reported this month in the press about the performance and integrity of accountants.

For example:

Patisserie Valerie accountants Grant Thornton are under investigation by the Financial Reporting Council (FRC) for its role as the auditor of the company which almost collapsed in October after it discovered a £40m black hole in its accounts.

Last month the former finance director of the cake and cafe chain (Chris Marsh) was arrested following the discovery of accounting irregularities.  Mr Marsh is an accountant and a member of the ICAEW.

The company was rescued from the collapse by its chairman Mr Luke Johnson who poured in £20m of his own money after the revelation that it was almost £10m in debt rather than having £28m in the bank as it had previously been reported.  It is hard to imagine how a cake and coffee shop can get into this kind of mess and it be missed by the accounting and management professionals.

Did you notice that in August this year Grant Thornton (GT) was fined £3m by the FRC for misconduct over its audits of Vimto producer Nichols and, very close to home, the University of Salford.  A former senior partner of the firm Eric Healey was fined £200k (discounted to £150k) and excluded from the ICAEW (Institute of Chartered Accountants for England and Wales) for 5 years.

But GT is not the only accountancy firm in the spotlight.  KPMG (one of the big 4) is also under investigation by the FRC for its role as auditor of Carrillion the giant construction company which collapsed in January due to the large amount of debt it was carrying and a plethora of uncompleted public contracts.  Whatever individuals may say about what is or isn’t included in an audit, it is hard to imagine that something of the shaky finances of a company like this was missed by the professionals.

So how has your November been?  What does your news look like? Whether you are global, national, regional or local – please get an accountant that is qualified, experienced and shot through with integrity.

Tom Bathgate MBA
tom.bathgate@broadthunder.co.uk