Interserve outsource firm accounts investigated

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Three years of accounts of one of the UK’s biggest government contractors, Interserve, will be investigated by the accountancy regulator.

The Financial Reporting Council said the audit for the years 2015, 2016 and 2017 by accountants Grant Thornton would be investigated.

Last month Interserve, which has 45,000 UK staff, and 68,000 globally, was put under administration.

It is the latest major company whose accounts have come under scrutiny.

A Grant Thornton spokesperson confirmed the firm had been told about the FRC’s decision to investigate. “We will of course fully cooperate with them in this matter,” the spokesperson said.

Its work auditing the accounts of Patisserie Valerie – which collapsed in January – is also being scrutinised. The cafe chain’s former director, Chris Marsh, was arrested after having been suspended by the company when the financial irregularities were uncovered.

A rival to the “big four” auditors of Deloitte, KPMG, EY and PwC, Grant Thornton was fined £3m last year after four of its senior employees admitted misconduct in handling the financial audits of Vimto-maker Nichols and the University of Salford.

The accounting industry is under intense scrutiny with MPs calling for a full structural break-up of the firms.

The Competition and Markets Authority is also looking at the industry after high-profile company collapses such as construction firm Carillion, which was audited by KPMG. The FRC is investigating KPMG’s audit of Carillion.

The FRC has also come under pressure and is to be scrapped. It will be replaced by a new regulator for accountancy firms, the Audit, Reporting and Governance Authority.