Sunday, July 3, 2022

Patisserie Valerie audits see Grant Thornton sued for £200m

Accountancy giant Grant Thornton is being sued for £200m by the liquidators of Patisserie Valerie (FRP Advisory) over alleged negligence in audits, reports in the Financial Times state.

The company collapsed after a suspected significant accounting fraud, entering administration in January 2019.

The uncovering of fraudulent accounting irregularities revealed Patisserie Valerie had overstated its financial position by £94m.

Grant Thornton audited the cafe chain for 12 years but did not notice an alleged manipulation of its books. Audits over the three years before the collapse are also under investigation.

In a comment to the Financial Times, Grant Thornton said: “We will rigorously defend the claim. Patisserie Valerie is a case that involves sustained and collusive fraud, including widespread deception of the auditors. The claim ignores the board’s and management’s own failings.

“As the matter is subject to an ongoing FRC investigation and civil claim, we are unable to comment further.”

FRP said that large accounting misstatements meant Patisserie Valerie’s board were left unaware that the company had insufficient funds to continue trading.

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