Jul 29, 2019

Grant Thornton to quit as Sports Direct auditor

Grant Thornton has told regulators it intends to quit as Sports Direct's auditor following concerns over the disclosure of a €674m tax bill, in a move that would pile more scrutiny on to the corporate governance of Mike Ashley's business. Grant Thornton made the decision to walk away from the company - one of its largest listed audit clients - after it was informed by Sports Direct of the significant tax liability just hours before it was due to sign off on its annual accounts, according to two people with knowledge of the matter. The FRC is investigating why Grant Thornton did not disclose payments made by Sports Direct to a company run by Mr Ashley's brother as a related party transaction in the accounts. Sports Direct said in its results that it had held "Early discussions" with the Big Four accounting firms over a possible tender process to replace Grant Thornton. Sports Direct has lost £150m due to Debenhams going into administration, while House of Fraser lost £54m in its first full year of Sports Direct ownership.

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