Grant Thornton scrambling for cover after Sports Direct audit delay<\/p>\n<\/p>\n
Grant Thornton\u2019s 2018 audit of Mike Ashley\u2019s company was one of several recently savaged<\/a> by the Financial Reporting Council as unsatisfactory, and now the 2019 accounts have been pushed back amid the mauling the auditing sector by the regulator.<\/p>\n Sports Direct said the accounts, due July 18, would be produced sometime before August 23, days before the four-month reporting deadline for quoted companies, as the auditor needs more time to work on the numbers.<\/p>\n In a statement, Sports Direct said the increased regulatory scrutiny of auditors and audits, including the review by the FRC of its historic filings, was a major factor in the delay.<\/p>\n Industry expert Prem Sikka, Emeritus Professor of Accounting at the University of Essex, said Grant Thornton\u2019s current public exposure may be a factor in the delay.<\/p>\n \u201cThey may be feeling that further reputational damage could be on the way if they hurry this,\u201d he told AccountingWEB. \u201cAlso, there is a school of thought that Sports Direct do not want the announcement of the accounts overshadowed by the regulator should it decide to fine Grant Thornton; it may be a case of simply moving the results as not to get wrapped in with that.\u201d<\/p>\n Sports Direct has indicated it will be the last time it engages Grant Thornton, and it is seeking to replace the firm that has scrutinised its books for the last decade.\u00a0<\/p>\n Whatever the problems in its relationship with Grant Thornton, some commentators believe Mike Ashley\u2019s firm may also be seeking to deflect from its own shortcomings; the firm has unsuccessfully tried to woo new auditors and already has been knocked back by three of the Big Four.\u00a0<\/p>\n The delay announcement was also accompanied by a statement that it is likely to miss profit forecasts amid uncertainty over the performance of House of Fraser, which sent investors fleeing.<\/p>\n \u201cThe complexities of the integration into the company of the House of Fraser business and the current uncertainty as to the future trading performance of this business,\u201d the retailer said.<\/p>\n The company said it understood its accounts and their audit were at \u201can advanced stage. However, there are a number of key areas to conclude on which could materially affect the guidance given in Sports Direct\u2019s announcement of 13 December 2018.\u201d<\/p>\n \u201cSports Direct, a highly successful FTSE250 firm, also brings with it the unconventional management style of Mike Ashley, and has a habit of attracting drama,\u201d said a forensic accountant at a Big Four firm speaking anonymously. \u201cGrant Thornton are in a bit of a pickle with this one and are \u2018damned if they do, damned if they don\u2019t\u2019. Everyone is being cautious at the moment, and for good reason, the whole sector is on trial.\u201d<\/p>\nReputational damage<\/h3>\n
General malaise<\/h3>\n