FRC to probe Grant Thornton’s audits of Interserve

Accounting watchdogs at the Financial Reporting Council are to examine audits by Grant Thornton for the three years from 2015.

Last month Interserve entered a pre-pack administration after financial restructuring plans drawn up by the company’s lenders were rejected by its shareholders.

The construction and outsourcing group had issued profit warnings in May 2016, October 2017and November 2018.

In December 2018, with debts approaching £700m, the company announced a debt for equity rescue deal.

The investigation into Grant Thornton, which handles over 7,000 companies, will be conducted under the Audit Enforcement Procedure.

The mid-tier accountancy firm was also involved in auditing the collapsed cake chain Patisserie Valerie.

The FRC said: “The Financial Reporting Council has commenced an investigation into the audit by Grant Thornton UK LLP of the financial statements of Interserve Plc for the years ended 31 December 2015, 2016 and 2017.

“The investigation will be conducted under the Audit Enforcement Procedure.”