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THE AUDITORS – HAVING THEIR PATISSERIE VALERIE CAKE AND
EATING IT
KEY WORDS: Accounting Fraud, Audit Committee, Auditors, Market Dominance
Abstract
In October 2018, Luke Johnson, Chairman of Patisserie
Holdings was confronted with his company’s bank
accounts being frozen. By 10th October the company
had suspended its Chief Finance Officer as it undertook
an investigation into “significant, and potentially
fraudulent, accounting irregularities” and “a potential
material mis-statement of the company’s accounts”.
Meanwhile, the Financial Reporting Council indicated
that it was investigating accountancy firm Grant
Thornton for its role as auditor to Patisserie Valerie.
The company was put into administration and where
once it had been valued at £440m was disposed of for
£13.5m. This collapse highlighted the problems of an
industry dominated by the ‘Big Four’ oligopolistic,
auditing firms.
