Grant Thornton seeks tougher oversight to rebuild large UK audit business
After a years-long pullback from high-risk audit work, Grant Thornton is trying to restore its standing in the UK market for large company mandates. The effort comes as the firm argues that lighter regulatory treatment has hurt its ability to compete for public interest entity audits rather than helped its recovery.
Highlights
- Grant Thornton is lobbying the Financial Reporting Council to restore its top-tier audit status as it rebuilds large public company audit business.
- The firm lost tier one ranking in 2023 after public interest entity audit clients dropped to 20, leading to lighter regulatory oversight and exclusion from annual audit quality reports.
- Between 2016 and 2022, Grant Thornton lost over 70% of its top audit clients amid fines and legal cases involving Patisserie Valerie, Sports Direct, and Interserve.
Push to regain top-tier audit standing
As reported by the Financial Times, Grant Thornton has been pressing the Financial Reporting Council to return it to the regulator's top tier of audit firms as it rebuilds its presence in audits of large listed companies and financial institutions.The UK accounting firm was moved out of the "tier one" group in 2023 after cutting its number of public interest entity, or PIE, audit clients to 20 in the previous year. That shift meant it was no longer subject to the FRC's most intensive oversight and was also excluded from the regulator's annual report on individual firms' audit quality inspection results.
Grant Thornton's retreat from the upper end of the market follows years of fines and legal cases tied to shortcomings in its work. The firm dropped more than 70 per cent of its top audit clients between 2016 and 2022 as it dealt with scrutiny linked to cases including Patisserie Valerie, Sports Direct and Interserve.
Wendy Russell, UK head of audit at Grant Thornton, said some prospective clients misread the firm's position outside the FRC's top tier as a ranking of audit quality rather than a supervisory category. A person familiar with the discussions said the firm repeatedly asked the regulator either to restore tier one status or to publish a standalone annual audit quality report covering Grant Thornton.
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