Accounting and Audit

Good Articles in Investors’ Chronicle

The views expressed in this article are those of the author and not necessarily those of ShareSoc There were several good articles in this week’s Investors’ Chronicle. I cover them briefly below. The Editor, Rosie Carr, reported on feedback on readers’ views on taxation. Should the wealthy readers of the IC pay more was one question previously posed and the consensus answer seemed to be Yes. For pensioners it was suggested that they should pay National Insurance on their income and that there ...

Redcentric Shareholders to Get Their Day in Court

This article represents the views of its author, not necessarily those of ShareSoc. Four years after defects in the published accounts of Redcentric plc (RCN) came to light, a trial of those accused of false accounting and other offences is finally to take place. Law360 reports: ...Fraser Fisher, former chief executive of Redcentric PLC, and the company's ex-chief financial officer, Timothy Coleman, denied charges that they had falsified financial documents and lied to an auditor between 2015 and 2016 when they appeared at ...

Grant Thornton Fined Trivial Amount over Patisserie Valerie Audits

The views expressed are those of the author and not necessarily those of ShareSoc. The interesting news today, at least for a former shareholder in Patisserie Holdings (CAKE) as I am, was the announcement by the Financial Reporting Council (FRC) of fines on Grant Thornton and their Audit Partner over the defective audits of the company in financial years 2015, 2016 and 2017. The company subsequently collapsed in 2018 when it became apparent that the accounts were a work of fiction. This is ...

KPMG fined again: but not the audit function this time!

This is a personal blog by Cliff Weight, ShareSoc Director and does not necessarily reflect the views of ShareSoc. This is so shocking that I am simply blogging the FRC announcement. My only comment is to highlight the glacial speed of such investigations. It has taken 10 years to get this far. The deterrent value of the £13 million fine would have had far more impact if the case had been concluded in two years! ShareSoc continues to lobby the FRC, FCA, ...

Restoring Trust in Audit and Corporate Governance

As it’s Friday afternoon with not much happening, and I have completed my latest complaint about the time it’s taking to complete a SIPP platform transfer, I decided to have a look at the public consultation on “Restoring Trust in Audit and Corporate Governance” from the BEIS Department. This is a quite horrendous consultation on the Government’s proposals to improve audit standards and director behaviour as foretold in the Kingman and Brydon reviews, with proposals for a new regulatory body (ARGA). That’s ...

Restoring Trust, After It’s Long Been Lost

Failings The Government BEIS Department have published a white paper entitled “Restoring trust in audit and corporate governance”. It’s an acknowledgement that the trust of investors in directors who manage the companies they invest in has long ago been lost. And the trust in auditors that the accounts issued by companies are accurate and give a fair view of a company’s financial position has also been lost. There are few stock market investors who have not been affected by one or more scandals ...

The Courage to Act, or Not

Some of us have plenty of time to read good books while under lockdown rules. Here’s one I have been reading. It’s a memoir by Ben Bernanke, former Chairman of the Federal Reserve under the title “The Courage to Act”. It covers the major worldwide financial crisis of 2007/8 created by the defaults in sub-prime mortgages. The book includes a very good section on how that came about and how packaging up such mortgages eventually led to a complete lack of ...

FRC Seminars, Lookers Results, Caparo Judgement and Autonomy Case

I attended two seminars organised by ShareSoc and UKSA with the Financial Reporting Council (FRC) yesterday (24/11/2020) and the day before. The first session was about the “ARGA transformation”, i.e. the steps being taken to improve the audits of companies and the reporting of accounts following the Kingman review two years ago. ARGA stands for Audit, Reporting and Governance Authority which will be the new name for the FRC. Before reporting on the meeting, it’s worth noting the latest example of how ...

Do Spivvy PE Funds IPO Their Investments at Inflated Prices? – and HM Treasury Consultation UK Listings Review

The AA 86% share price decline, coming on top of the Saga and Aston Martin makes me wonder if PE firms and others are exploiting those retail investors willing to buy into a fashionable story. I have to admit to losing money on Saga, whose share price is down 90% from its 2016 high. My mother-in-law was a huge fan of Saga and she gave me a present of Saga membership when I was 50, so when they were floated, I and ...

Law Suit Launched Against Grant Thornton over Patisserie Valerie Audits

The Daily Telegraph and some other sources have reported that the liquidators of Patisserie Valerie (CAKE) have filed a claim in the High Court against Grant Thornton over the audits of Patisserie Valerie in the years before it went into administration. I reported previously that the accounts of Patisserie were a complete fiction – see Reference 1 below – with the assets of the firm overstated by more than £90 million. The liquidators are FRP Advisory and they have appointed lawyers Mischon de ...