Grant Thornton fined by audit watchdog for failures with local authority pension fund

The UK’s audit watchdog has fined Grant Thornton £40,000 after it found the firm failed to comply with auditing frameworks for a local authority’s pension fund.

The Financial Reporting Council (FRC) enforcement committee found failures in the reviewed audit of a local authority’s pension fund for the year ended 31 March 2021.

The committee considered the failures represented a significant departure from the standards expected of a registered auditor and concluded that it had the potential to affect the public, employees, pensioners or creditors.

The failures included two uncorrected material errors which appeared in the version of the pension fund’s audited financial statements that was included in the local authority’s annual report, which did not appear the financial statements. As well as insufficient audit evidence obtained that the value of investments was materially accurate.

The FRC did acknowledge that Grant Thornton provided co-operation, including at an early stage, took appropriate remedial steps promptly once the failing was identified and demonstrated contrition. The watchdog also stated that there was also no evidence to support financial gain or benefit from the failure.

As a result of the failures for this client, the FRC considered imposed a sanction on Grant Thornton by proposing a regulatory penalty of £50,000. This figure was then adjusted by a discount of 20 per cent for co-operation and other mitigating factors to £40,000.

The watchdog said that the sanction was accepted by Grant Thornton.

A spokesperson for Grant Thornton UK said: “We note the findings of the regulator’s investigation, with which we have cooperated throughout, and regret the errors identified. As a leading provider of audit and related assurance services to the public sector, we remain committed to high-quality work and have taken steps to further improve this.”