FRC: Investigation in connection with the audit of the financial statements of Interserve Plc

11 Apr 2019 11:50 AM

The Financial Reporting Council (FRC) has commenced an investigation into the audit by Grant Thornton UK LLP of the financial statements of Interserve Plc for the years ended 31 December 2015, 2016 and 2017. The investigation will be conducted under the Audit Enforcement Procedure.

Notes to editors:

1. The FRC’s mission is to promote transparency and integrity in business.  The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
2. To meet its responsibility as the competent authority in respect of audit enforcement, the FRC operates the Audit Enforcement Procedure. This procedure applies to the investigation and sanctioning of breaches of the various requirements of the statutory auditors of Public Interest Entities (PIEs) and any other cases retained by the FRC including AIM companies with a market capitalisation in excess of €200m.

In brief, the stages of the Audit Enforcement Procedure are: 

• Initial case examination and decision to investigate
• Investigation
• Decision by Executive Counsel as to whether to issue a Decision Notice (a notice with the findings and recommended sanction);
• Referral to Enforcement Committee and decision by the Enforcement Committee whether to issue a Decision Notice; and
• Referral to a Tribunal
• In order for a matter to be referred for investigation by the FRC’s Executive Counsel under the Audit Enforcement Procedure, the FRC’s Conduct Committee is required to decide whether there is good reason to investigate an Allegation in relation to a Statutory Auditor and/or a Statutory Audit Firm.

Investigations are usually conducted by Executive Counsel and the Enforcement division. The FRC’s Conduct Committee may direct that the investigation is delegated to a Recognised Supervisory Body (RSB) which will provide an investigation report to the Executive Counsel so that (s)he may decide whether to issue a Decision Notice.

3. All Press enquiries should be directed to:

• Peter Timberlake, Head of Communications, on telephone: 020 7492 2397/ 07768 502332, or email: p.timberlake@frc.org.uk.
• Rita Carolan, Communications Manager, on telephone: 020 7492 2307/ 07428 149096 or email: r.carolan@frc.org.uk.
• Alana Sinnen, Communications Manager, on telephone: 020 7492 2395/ 07949 005526 or email: a.sinnen@frc.org.uk.

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