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UK watchdog investigates Grant Thornton's Patisserie audit

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UK watchdog investigates Grant Thornton's Patisserie audit

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(Reuters) - Britain's accounting watchdog said on Wednesday it had launched an investigation into the audit by Grant Thornton UK of cafe chain owner Patisserie Holdings Plc's <CAKEP.L> financial statements for 2015-2017.

The Financial Reporting Council (FRC) said it was investigating the preparation and approval of Patisserie's financial statements and other financial information by the company's former Chief Financial Officer Christopher Marsh.

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Grant Thornton handles the accounts of Patisserie, which has been rocked by an accounting scandal and came close to collapse before getting a 20-million-pound lifeline from Chairman Luke Johnson.

Patisserie has been under pressure since the accounting black hole was discovered in October, forcing Chief Executive Paul May and suspended CFO Marsh to step down.

The FRC, which oversees accounting in Britain, had been looking into the Patisserie case.

Britain's Competition and Markets Authority (CMA) also launched a fast-track review of the audit sector in October with all options on the table after concerns over the collapse of construction company Carillion and poor results from reviews of audit quality.

In the latest in a series of reprimands for several of Britain's biggest auditing firms, Grant Thornton was recently fined 4 million pounds by the FRC after four of its senior employees admitted misconduct in handling the financial audits of Nichols Plc <NICL.L> and the University of Salford.

Audit firms have been under the scanner and Britain's parliament is slated to start an inquiry into auditing in January to ensure that two pending reviews will lead to actual reform of a "broken" sector dominated by the Big Four accounting firms Deloitte, PwC, EY and KPMG.

Grant Thornton and Patisserie could not immediately be reached for comment.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier)

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