Grant Thornton fined £3m over serious misconduct
Accounting firm Grant Thornton has been fined £3m by the industry watchdog for misconduct over its audits of Vimto-maker Nichols and the University of Salford.
The Financial Reporting Council (FRC) said the misconduct related to the appointment of former senior partner Eric Healey to the companies' audit committees, despite being employed at the same time to provide consultancy work, creating "serious familiarity and self-interest threats".
The FRC said it had fined Mr Healey £200,000 - discounted to £150,000 on settlement - and excluded him from the Institute of Chartered Accountants for five years.
It has also imposed penalties on three of Grant Thornton's former senior statutory auditors - Kevin Engel, David Barnes and Joanne Kearns - following their admissions of misconduct over the audits.
The fines come as auditors are under heavy scrutiny following a string of scandals and amid concerns over conflicts of interest and a lack of competition in the sector.
The FRC has called for an inquiry into whether the 'big four' accountancy giants - Deloitte, EY, KPMG and PwC - should be broken up, with their audit divisions spun off.
The watchdog said its investigation found misconduct over Grant Thornton's financial statements of Nichols and the University of Salford for years ending 2010, 2011, 2012 and 2013.
It said that Mr Healey's employment as a consultant as well as an auditor resulted in the "loss of independence" of eight audits over the course of the four years.