Sports Direct audit failings see Grant Thornton receive over £1.3m in financial sanctions
Grant Thornton has been handed financial sanctions of over £1.3m for Sports Direct, now Frasers Group, audit failings.
The executive counsel of the Financial Reporting Council (FRC) has issued Final Decision Notices under the Audit Enforcement Procedure (the AEP) and imposed sanctions against Grant Thornton (GT), as well as Philip Westerman, formerly a partner of GT, in relation to their statutory audits of the financial statements of Sports Direct International plc for the financial years ended 24 April 2016 (the 2016 Audit) and 29 April 2018 (the 2018 Audit).
In respect of the 2016 Audit a financial sanction of £1,700,000, adjusted for mitigating factors and admissions/early disposal to £1,130,500, has been imposed against GT.
In respect of the 2018 Audit a financial sanction of £350,000, adjusted for aggravating and mitigating factors and admissions/early disposal to £193,375, has been imposed against GT.
Non-financial sanctions comprise, in respect of the 2016 Audit, a requirement for GT to report to the FRC on whether changes made to its audit methodology are resulting in a better exercise and documentation of an audit team’s judgement regarding key audit matters.
In respect of the 2018 Audit, there is a requirement for GT to undertake thematic reviews and report to the FRC as to the efficacy of enhancements it has introduced regarding the audit of inventory provisions of retail entities and the use of audit data analytics to audit revenue.
Mr Westerman meanwhile has been handed financial sanctions in respect of the 2016 Audit of £90,000, adjusted for admissions/early disposal to £63,000, and in respect of the 2018 Audit, a financial sanction of £30,000, adjusted for aggravating and mitigating factors and admissions/early disposal to £16,575.
The FRC noted that the adverse findings against GT and Mr Westerman, admitted at an early stage, concern basic and important requirements which are designed to ensure the quality and effectiveness of an audit; they are fundamental to the work of an auditor.
As a result of the adverse findings, both the 2016 & 2018 Audits failed in their principal objective of providing reasonable assurance that the 2016 & 2018 financial statements were free from material misstatement.
The FRC said that in respect of the 2016 Audit, there were serious failings in the conduct of the audit as to whether Sports Direct’s financial statements contained the necessary disclosures to draw attention to the possibility that its financial position may have been affected by its relationship with ‘Delivery Company A’.
With the 2018 Audit, there were failures in audit work relating to two specific areas of the audit: inventory provisions and website sales revenue.
The inventory provision in 2018 was £162.2m and an increase on the previous audit year. It was a highly material amount. Website sales was the second largest area of revenue for Sports Direct in 2018, accounting for 20% of total revenue. GT and Mr Westerman identified that both were areas of significant risk in the 2018 Audit.
The FRC said GT and Mr Westerman failed to obtain sufficient appropriate audit evidence, evaluate whether information provided by Sports Direct was sufficiently reliable, or to prepare sufficient audit documentation commensurate with the risk in relation to these two areas of the audit.
Jamie Symington, deputy executive counsel to the FRC, said: “The audit failings in this case were serious and relate to fundamental auditing standards. It is particularly important that auditors follow up with due rigour where they have identified potential related party transactions as a significant audit risk.
“Auditors must adopt a mindset of professional scepticism, and exercise good judgment based on sufficient and properly documented evidence. The package of financial and non-financial sanctions imposed by the FRC on the auditors in this case will help to drive improvements at the firm and the wider industry.”
Organisations offered fresh ideas for positive change and growth through #NBSBright challenge
Organisations looking for new ways to deliver positive change and growth can access the knowledge and skills of final year business students, as Nottingham Business School (NBS) launches its #NBSBright challenge for 2022.
Supported by experienced academics, groups of students from a range of courses, including Business, Business Management and Entrepreneurship, Accounting and Finance, Marketing, and Economics, will apply their studies to real business issues and present detailed analysis, findings and recommendations to the challenge submitters.
The initiative aligns with the mission of NBS, to provide research and education that contributes to academic excellence with a positive impact on people, business and society. Importantly the challenge also ensures that every student engages in experiential learning and gets the chance to apply their learning to real organisational issues.
Head of personalisation and experiential learning at NBS, Amanda Thompson, said: “#NBSBright is designed to help businesses of all sizes to grow and prosper through the bright ideas of the next generation of business professionals.
“Our highly motivated students have gained a wealth of knowledge during their studies and they are eager to apply their skills to help organisations recover, grow and succeed.
“We’re inviting businesses to submit a range of challenges, from building brand and becoming more responsive to customer demands, to coping with market volatility, capitalising on success, growing profits or meeting sustainability goals. The students can tackle a wide range of issues and undertake research and inquiry that organisations really need to do but perhaps haven’t got the time or resource to dedicate at present.”
#NBSBright provides an opportunity for organisations to gain insight and solutions to challenges such as the need for business diversification, process restructuring, costing, pricing, or issues such as managing remotely and staff wellbeing.
This is the third year that #NBSBright has taken place, with organisations which took part last year expressing their gratitude for the student insights.
Katherine Jennick, creator of What’s your strength?® – an award-winning tool empowering people across the globe, has taken on several of the suggestions and has stepped up her marketing, including entering two business start-up awards. She has since been a finalist in the Sole-to-Sole category at The Small Awards and the winner of the Consumer Services Start-Up of the Year for the Midlands StartUp Awards National Series.
Katherine said: “The work produced by students was a high standard and really helpful for me to drive my business forward. They offered insightful advice and ideas about my marketing strategy which I then implemented. I hope it’s a really positive experience for all the students and local business involved in the #NBSBright challenge this year.”
Sarah Whiteside, director of mk Profile Systems, manufacturers of modular construction kit for factory automation, commented: “It was very satisfying to be able to help the students with some real-life business experience. Some of their questions really got us thinking.”
Organisations are invited to submit a challenge or research topic by Friday 19 August and will only need to commit to a virtual introductory meeting in October and a final presentation in November. For further information contact NBSStudentProjects@ntu.ac.uk
NBS is accredited by EQUIS and AACSB, which are internationally recognised hallmarks of excellence and quality for business education, and also holds Small Business Charter accreditation (SBC), a mark of excellence for business schools with expertise in supporting small businesses, student entrepreneurship and engagement in the local economy.
Double hire for Midlands digital PR agency following business growth
Jennie Holland PR has welcomed two new digital PR executives to the team as the agency expands its portfolio of clients.
Paige Wykes and Laura Markham will specialise in social media management and press outreach.
Based in Nottingham, Jennie Holland PR provides digital marketing services, with a focus on media relations, social media management, content creation, influencer marketing and crisis communications.
Paige joins from a previous digital marketing role in Sheffield and has a degree in Journalism with creative writing.
Having completed an internship with Jennie Holland PR last year, Laura returns to the firm having just graduated with a degree in International Fashion Business from Nottingham Trent University.
The new recruits follow a flurry of new client wins with the agency being appointed to work with brands within recruitment, construction, property, jewellery and performance coaching.
Paige and Laura will be working alongside the wider Jennie Holland PR team to strategically raise profile, credibility, reputation and sales for its clients through its specialist services.
Managing Director, Jennie Holland, said: “Digital PR and marketing is a fundamental part of any business that wants to be seen, heard and understood by its customers. We are working with an increasing amount of incredible companies who really see the value and reap the benefits that our services bring.
“Welcoming new people to our team means we are adding more skills and bringing in fresh ideas which further adds to our team offer and the creative prowess of Jennie Holland PR.”
Iron Mountain takes 312,000 sq ft of logistics space in Kettering
Tritax Symmetry has exchanged an agreement for lease with Iron Mountain for 312,000 sq ft of logistics space at Symmetry Park in Kettering.
The agreement will see Iron Mountain take Unit 2 at Symmetry Park Kettering when it reaches practical completion in January 2023, the largest unit in the current phase of Tritax Symmetry’s speculative development.
Buckingham Group Contracting was appointed in April to deliver the facility, building the scheme to Net Zero Carbon in Construction standards, in line with the UK Green Building Council’s guidelines.
Jonathan Wallis, development director for Tritax Symmetry, said: “We are proud to welcome Iron Mountain to Kettering, so soon after concluding our transaction with them for one million square foot of space at Symmetry Park, Rugby.
“It has been a pleasure discussing the options with Iron Mountain and this commitment is a clear demonstration of having forged such a close, collaborative approach between the two businesses. This letting evidences the strength of Symmetry Park, Kettering as a key logistics location in the East Midlands.”
He continued: “This will be the first building delivered by Tritax Symmetry at Symmetry Park Kettering and with reserved matters planning permission for further buildings, delivering 2.3 million of space across the 136 acre site, this agreement marks the start of delivery at this important strategic site.”
As part of Iron Mountain’s ambitions to achieve Net Zero emissions by 2040 the development at Kettering followed a rigourous assessment of the facility’s potential for sustainability. The leased buildings will achieve net zero carbon construction and come with 20% photovoltaic roof coverings. They will also offer charging points for electric vehicles.
Phil Shepley VP and commercial lead for Iron Mountain in the UK, added: “Our rapid expansion in the UK underlines the demand for our services at a time where e-commerce is at the forefront of the UK warehousing and logistics property industry.
“Growth in jobs and investment into the local economy is key in all of the locations in which we operate and we are looking forward to bringing a range of opportunities such as digital and record management services to Symmetry Park, Kettering.”
Councillor Jason Smithers, leader of North Northamptonshire Council, said: “The letting to Iron Mountain is an important step for this key employment site in North Northamptonshire.
“The investment at Symmetry Park, Kettering will attract jobs and Tritax Symmetry’s commitment to Net Zero Carbon in Construction is in line with our aims of responsible growth. This news demonstrates economic confidence in North Northamptonshire and delivers a clear message of what can be achieved, both at this site and around our region.”
Tritax Symmetry has secured reserved matters consent for an additional 500,000 sq ft building (cross-dock and single sided options) and a 123,000 sq ft building at Symmetry Park, Kettering. The outline consent includes for buildings to be delivered in excess of 1 million sq ft.
The Project team includes: Stephen George + Partners (Architects), Trinity Property Consultants (Project Managers), Feasibility (Quantity Surveyors), Framptons Town Planning (Planning Consultants).
Burbage Realty and BNP Paribas Real Estate are joint letting agents for the scheme. Tom Shaw of JLL advised Iron Mountain.
David Wilson Home Site Manager in Derbyshire wins top national award
A site manager at David Wilson Homes’ Ramblers’ Gate development in Ashbourne has won a top national award for the quality of the homes he is building.
Nathan Mannion (40), from Derby, has won a Pride in the Job Quality Award from the National House Building Council (NHBC). These prestigious awards are known as the “Oscars of the housebuilding industry”.
In total, Barratt Developments’ site managers have won 98 Pride in the Job Quality Awards, which is more than any other housebuilder. This is the 18th year in a row that site managers from Barratt Developments have won more of these awards than any other builder, underlining the long-term commitment David Wilson Homes has to building high quality properties.
Nathan has been with David Wilson Homes for nine years, and won both a Pride in the Job award and a Seal of Excellence award last year.
Nathan said: “To win for the second time is even more amazing, and it’s been no mean feat this year, everyone on the site worked really hard.”
“All aspects of the site are great, I’ve enjoyed it from start to finish, as the site is now coming to a close.”
“The whole team have been amazing this year, but I’d like to thank Jeremy Austin and Adam Holloway, both assistant site managers, and the contracts manager Daryl Marshall, as well as all our sub-contractors and labourers.”
The Pride in the Job Awards showcase the best site managers in the country who can demonstrate exceptional standards in building new communities, delivering the highest quality homes for their customers. Each site manager is judged on a range of key criteria including health and safety, their technical knowledge, customer service and attention to detail.
Every site manager who is registered with the NHBC is automatically entered into the awards, with just 450 winners being selected from over 11,000 entrants.
The awards also help to build quality standards across both developments and teams, with winning site managers invariably having an assistant site manager working with them. They in turn learn the high standards that are needed to win, increasing quality throughout the industry.
Darren Langton, Managing Director at David Wilson Homes East Midlands, said: “We want to make our customers happy by building high quality homes for them. These awards recognise only the best new homes and well-run developments and we are very proud of our record having won more of these awards than any other housebuilder for 18 years in a row.
“Every customer who buys a home built by a site manager who has won a Pride in the Job Quality award can have confidence that their home is of the highest possible quality.”
These awards closely follow Barratt Developments being awarded five stars by its customers for satisfaction in the annual Home Builders Federation (HBF) new homes survey. To be rated five star means that more than 90% of its customers would recommend one of its homes to a friend, with the developer being the only major national housebuilder to be rated five star for 13 years in a row.
Ways to increase employee productivity in 2022
It’s unavoidable that profits are a priority for businesses, which means you need your staff to be productive to keep the wheels turning. However, some traditional employment approaches may be counterproductive or even harming employee wellbeing.
It’s well known that employee productivity increases when wellbeing is prioritised. That means looking after your staff is a sustainable method of boosting your output. With so much talk of ‘company benefits’, what will really make the biggest difference? Read on to find out what you need to do to increase employee yield in 2022.
Learning
How can you expect your employees to become even better at what they do if you don’t offer them the chance to learn?
If you devote time, effort and resources to providing training opportunities, you’ll reap the rewards with a more effective and satisfied workforce.
Agile working
Under an approach which incorporates agile working, employees have the flexibility to decide the conditions of their work, i.e. where, when and how. Forcing everyone to work the same hours in a day or days in a week could reduce productivity if it doesn’t suit who you’ve hired.
Given the variety of circumstances people may have in their private lives, agile working is a very inclusive policy to attract diverse talent. Working parents, disabled colleagues and international employees are just a few examples of individuals who may perform better with the ability to take charge of their professional conditions.
Technology
It’ll be tough for your team to perform flexibly at its best without good technology. Now that working from home is a priority for potential candidates, you’ll need to invest in good portable solutions. However, this is clearly very costly. If you’re struggling to invest in it all upfront, you could consider an unsecured business loan so your employees can work unhindered.
The use of cloud services may increase productivity by allowing better access to all information employees need, allowing for a centralised source of truth. Likewise, it’ll be easier to share and collaborate between employees, increasing teamwork along the way.
Realistic goals
Your employees will not perform well if they’re tired and overworked. The major way to prevent this is by ensuring everyone’s workload is manageable and doesn’t lead to burnout.
Check in with people in one-to-one sessions to see how they’re feeling and listen to their assessment of their role to make sure you’re setting realistic goals.
Pedal power of BB&J partner reaps rewards for charity
Commercial property specialist Mark Richardson, who is a partner at BB&J Commercial in The Wyvern, Derby, has raised more than £1,000 for local specialist child exploitation charity Safe and Sound.
Mark is the charity’s chair of trustees and pledged to cycle the 150 mile coast to coast route in one day as part of BB&J Commercial’s support for Safe and Sound’s 20th anniversary year.
The challenging route from Seascale on the west coast, through the Lake District, Yorkshire Dales, Vale of York and North Yorkshire Moors to Whitby on the east coast took Mark 10½ hours to complete in blistering heat.
Mark said: “As well as heading the board of trustees who all bring professional skills to the table and raising awareness across our networks of the dangers facing children and young people in our local communities, I am glad that I have been able to put my love of cycling to good use and raise money for this great charity.
“I have been cycling for about ten years and, during that time, I have done some memorable endurance rides in the UK and Europe including three road routes in one day up Mont Ventoux in France to celebrate my 50th birthday.
“This time, it was far hotter than forecast and there were some tough climbs but my companions and I had done a lot of training in the Peak District which held us in good stead.
“People are still pledging money and I hope to hit my £1,500 target in the coming weeks. This will be put to great use by the team at Safe and Sound who are doing a fantastic job supporting and protecting young people and their families whose lives have been affected by child exploitation.
“I am now looking forward to planning my next fundraising challenge which may involve two wheels – or something totally different.”
Safe and Sound CEO Tracy Harrison added: “We are very grateful to Mark for his commitment to the charity both with his business hat and cycling helmet on!
“We depend greatly on the generosity of individuals, organisations and businesses to raise money for our work so that we can keep pace with the rising demand for our help and support across the city and county due to the increase in online and in-person child exploitation.”
Survey highlights vital importance of manufacturing to East Midlands as sector recovers from COVID
A new report from Make UK, the manufacturers’ organisation, and accountancy and business advisory firm BDO LLP shows that manufacturing remains central to the success of the East Midlands, with the sector accounting for 16.3% of the region’s economy (an increase from 15.9% in the year to June 2021), way above the national average of 10%.
According to the report, which analyses the overall status of industry in the region over the last twelve months, the East Midlands was initially slower than other UK regions to begin recovery due to the exposure of the region to the automotive and aerospace sectors.
However, growth in the region is now picking up strongly due to the importance of the food and drink sector (the second largest in the UK), which has been driving the region’s performance as hospitality and retail sectors fully re-opened in the first half of the year.
In addition, both investment and job prospects have improved significantly since the turn of the year as firms hire to meet increased demand.
Three subsectors account for almost half of regional manufacturing output. Food and drink remains the biggest manufacturing sector in the region accounting for almost a quarter of output (22.2%), followed by transport equipment (13.8%) and fabricated metals (10.5%).
The East Midlands also continues to be a strong export performer, accounting for 6% of total UK manufacturing exports. The EU is the region’s main export destination where its dependence has increased (51% from 48%) followed by Asia & Oceania, which at 22% is a significantly higher exposure than other UK regions. North America is the third largest market, accounting for 14% of the region’s exports.
Charlotte Horobin, region director for Make UK in the Midlands, said: “Despite the talk of ‘Global Britain’ history shows that geography is always the main determinant of trade. The EU was always going to remain the main destination for manufacturers in the East Midlands who appear to becoming more, not less, dependent on it as a market. As a result, it is vital the Government now takes steps to reset the trading relationship with the bloc and, wherever possible, eases and simplifies trading to boost exports for SMEs in particular.”
Jon Gilpin, head of manufacturing at BDO in the Midlands, added: “Manufacturers across the region support hundreds of thousands of jobs and make a significant contribution to the local economy.
“The increasing dependence on EU export markets shows that local businesses have done a good job in adapting to new post-Brexit rules, but ongoing Government support may well be required, particularly for firms at the smaller end of the spectrum.
“It’s vitally important for the region’s exporters that good trading relationships with our European neighbours are maintained to ensure that trade remains as frictionless as possible. We also hope to see further progress on free trade deals which could offer new and exciting opportunities for East Midlands businesses.”
Ringrose Law launches industry leading technology to enhance their client experience
Earlier this year Ringrose Law launched Perfect Portal to enhance and improve their client experience.
Perfect Portal is the industry’s leading digital onboarding and client-centric technology solution for law firms and is used by a number of client focused law firms across the country.
The technology includes a brand-new client onboarding software, allowing the firm to centrally deal with all enquiries coming into the business, creating a personal service to clients, understanding their needs and ensuring they are dealt with by the right person.
The technology also includes a Ringrose Law app for clients to download at the start of their matter that supports every area of law, with integrated features from electronic verification of identity, open banking for verification of funds, payment on account, document completion, digital signing of documents, matter updates and more. The app allows clients to upload and access documents and receive updates on their file 24/7, whilst still receiving a personal one to one experience with their legal adviser.
The firm launched the software earlier this year for their Personal Injury & Medical Negligence Teams and their Residential Conveyancing Team and hopes to have integrated it into all departments by the end of the year.
John Knight, senior director of the firm, says: “We are a personable legal practice that puts our clients and their individual needs at the forefront of what we do. Whilst we still maintain a very personal client experience, the new client App, should clients wish to use it, sets us apart from our local competitors, the App looks fantastic, is easy to use and provides our clients with access to their file at their own convenience.
“Our new client onboarding process allows us to track every enquiry into the firm, gain valuable insight and feedback information at a level that we haven’t had before, and helps us improve our client service all the time.”
For more information or to speak to a member of the team please contact wecanhelp@ringroselaw.co.uk
BDO expands Expat team with Midlands hire
Accountancy and business advisory firm BDO LLP has strengthened its Expat team with the appointment of Mark Allsopp as associate director.
Mark is an experienced dual qualified UK/US tax advisor with over 14 years’ experience in expatriate areas, including inbound/outbound advisory US to UK and UK to US, UK/US resident considerations, and streamlined filing for non-compliant US individuals.
At BDO, he will primarily be responsible for assisting US individuals who are moving to, or who are based in the UK, to navigate the complexities of both the UK and US tax systems, allowing the individual to be tax efficient in both countries.
Mark will be based at BDO’s new Nottingham city centre office, but will be part of the firm’s North Region Expat team.
Ben Tarry, tax partner in the Midlands, said: “Mark is a fantastic addition to our Expat team – not just in the Midlands, but across the North region too.
“His appointment marks an exciting opportunity for the firm, as we look to unlock significant potential in the regional markets. Mark’s experience in areas such as expatriation of US individuals and relevant tax compliance, will be vital in helping us to build our presence outside of London.”
Mark said: “I’m delighted to be joining an ambitious and enthusiastic team, as we look to enhance our US personal tax and Expat offering, both here in the Midlands and across other key UK regions.”
