Sports Direct Auditor Quits After Huge Tax Bill

[D day]

What Morecambe?

Much worse

 

[McQueen]

The big 4 are in the news almost daily just now. You have partners being fired for bullying, resigning due to being bullied, under investigation for insider dealing. You have big 4 firms having their name dragged through the mud because businesses are failing, the auditor s being blamed and the general public don’t understand what an audit is meant to achieve. The reputation of the big 4 has taken a battering in the past 2 years.

Mike Ashley’s name is in the mud. He doesn’t give a fu ck about paying suppliers or about job security for his workers.

Why would a firm trying to improve their already extremely damaged reputation, risk damaging it further by auditing the most hated company in the UK? It sounds like any of the big 4 could name their price, but often their reputation is more important.

This is going to end up with an auditor being appointed.

 

[Hillheadbear]

Big 5 auditors under increasing scrutiny over failures to identify poor practices at retail businesses. Tesco, Patisserie Valerie etc

Sports Direct and Ashley already have a toxic image in the city, so auditors will be very cautious over such an appointment

Will end up with a lower grade accountancy firm which won't play well with investment community

It is not the job of the auditor to tell management how to run their business. The job of the auditor is to ensure that the accounting is done right, that it is complete, that it is accurate and in accordance with GAAP.

In a large business with millions (sometimes billions) of transactions that can be very difficult. To a large extent you rely on the honesty of management and on the internal control system. So your audit focuses on high risk areas (e.g. where there are accounting judgement calls) and you audit the system for the high volume stuff because it's impossible to look at every transaction. In that environment, fraud can be very hard to detect and especially if there is collusion and if senior management are involved.

Just as the police don't solve every case, the auditors don't get every audit 100% right.

 

[chosen few]

Surely he could just sell some of his tanks

 

[WATP]

Not one credible firm will willingly touch them.

SD will fail the client risk assessment that any firm has in place.

Probably looking at the FRC instructing a firm to take it on and said firm will charge the earth to cover its risk exposure.

Can the FRC forcibly instruct a private audit firm to take on a client.....not sure they can....if they can how do they decide which firm it will be?

 

[johnnylittle]

Blackpool?
Why not Benbecula?

Or Hell, after the fat Baskard croaks.