Will Folkestone & Hythe District Council’s auditor – Grant Thornton – find the fraud?
Each year every local authority is required by law to make up its accounts and get an auditor to sign off on them. Members of the public have certain rights during the period when the accounts are being audited to inspect the accounts, question what they see and raise objections. The auditor for Folkestone & Hythe District Council is Grant Thornton. Folkestone & Hythe District Council’s accounts were open to inspection by you the public between 29 May 2019 to 9 July 2019.
At the beginning of July the Financial Reporting Council (FRC), the UK’s accounting and auditing regulator, slipped out a report heavily critical of Grant Thornton’s auditing skills. The Audit Quality Inspection report of Grant Thornton LLP by the FRC says:
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We assessed four out of eight audits as requiring more than limited improvements, compared with two of eight in 2017/18. We have assessed ten of the 39 audits that we have reviewed over the past five years as requiring significant improvements. This percentage (26%) is markedly higher than any other firm we have inspected over the period. This level of audit quality is unacceptable.
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The quality of the audits inspected in the year, and indeed the overall lack of improvement in quality over the past five years, is a matter of deep concern. We have therefore required the firm to prepare and implement a detailed action plan to undertake an overhaul of its audit practice to improve quality.
Do such comments by the regulator instil confidence in you that Grant Thornton can undertake a proper audit? For us it does not.
Back in May of this year we reported on how Grant Thornton misled KCC’s Audit & Governance Committee.
The Financial Reporting Council’s report make’s it clear they have made Grant Thornton subject to an Audit Improvement Plan because they have been so bad at auditing.
The FRC review findings of Grant Thornton make clear they must:
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Improve the consistency of audit teams’ application of professional scepticism.
Professional scepticism is defined as
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“an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.”
Do you believe in coincidence?
Issues with missed contract fraud at previous social housing providers run by the current top tier of management at EKH and audited by GT, seems to be a pattern emerging of failure to manage both contracts and accounts then get GT to say everything is as it should be?
nice work if you can get it?
As an auditor at a small local firm of accountants, I very much doubt GT will look to closely. GT have become to close to their clients and this prevents the auditor auditing without fear or favour. You ask a very valid question and I hope GT will find the fraud you have written about successfully over the last year.
I work for Grant Thornton in London and live locally. With our past piss poor record of undertaking audits, I have no faith in our company discovering the fraud perpetrated by P & R.
The same auditors that were in place when Shepway District Council was alleged to have no accurate knowledge of how much money had been taken from council’s car park machines – but was believed to be as much as £150,000?
Council could not prove how he had stolen so after admitting stealing £12,000 he pleaded guilty and received a 10-week suspended sentence.
Grant Thornton are also having problems with the Sports Direct audit.
https://www.theguardian.com/business/nils-pratley-on-finance/2019/jul/15/sports-directs-delayed-accounts-spell-crunch-time-for-auditors-grant-thornton
Grant Thornton’s problems with the auditing of the accounts of Sports Direct are getting worse rather than better.
https://www.bbc.co.uk/news/business-49124375