Page 22 - Patisserie Valerie Teaching Note
P. 22
Luke Johnson
Johnson said that the speed at which Patisserie Valerie
collapsed left him reeling with shock, unable to sleep and
struggling to concentrate. “If I was arrogant at times before,
my ego has taken quite a battering since. A very public
disaster such as this shatters your self-belief. You think you
are constructing a reasonably well-ordered life, and then in
a matter of a couple of days it all starts to unravel.” (B)
A few weeks before the collapse Johnson had been
pontificating on the characteristics of fraud and how to
identify such. However, within a couple of months his
company had been sold off and he had lost nearly £180m of
his £240m wealth.
TRUST
“I received solid weekly numbers, comprehensive monthly
management accounts, and of course annual accounts that
were given a clean bill of health by our auditors. If ever
there were queries, I got satisfactory answers.”
Luke Johnson
To some extent Johnson can be forgiven for not appreciating
that fraud was being perpetrated. On one hand he trusted
the friend he had previously worked with and on the other
he trusted the independent auditors he thought were
looking after the interests of the shareholders.
The problem appears to be that there was little if any
internal auditing and just as importantly it is essential to
