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Grant Thornton to face probe into audits of failed contractor Interserve

Accountant is already under investigation for work at Patissrie Valerie over the same period

Interserve
Grant Thornton is being investigated n two fronts

Grant Thornton is facing a probe into how it audited the accounts of failed contractor Interserve.

Accountancy industry regulator the Financial Reporting Council said it had opened the review into audits of Interserve’s 2015, 2016 and 2017 financial statements.

Grant Thornton is already being investigated by the FRC for its work for Patisserie Valerie over the same three years.

The cake and coffee chain collapsed into administration earlier this year after a £94mln overstatement of its assets.

Administration

Interserve went into a pre-pack administration in March when shareholders rejected a debt-for-equity swap that would have seen lenders own 95% of the business.

The contractor’s borrowers immediately took over the business following that decision.

That avoided a complete collapse of Interserve, which was the fate of fellow contractor Carillion early in 2018.

The FRC is investigating KPMG’s audits of Carillion over a period covering 2013 to 2017.

In March, the government announced it would replace the FRC after its effectiveness was heavily criticised in a review by Sir John Kingman.

A new body, the Audit, Reporting and Governance Authority, will have statutory powers to sanction firms and directors when companies fail.

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