Patisserie Valerie accountants have admitted to MPs, that when conducting an audit, they do not look for fraud, as audits solely look to the past and are not set up to detect fraud.
Patisserie Holdings went into administration following a £40m black hole was found in their accounts, Grant Thornton is now under investigation over their auditing.
Speaking at a hearing to the Business, Energy and Industrial Strategy Committee (BEIS) David Dunckley, of Grant Thornton said, “I can’t talk about Patisserie Valerie because there is a live investigation, which we’re co-operating with.
“But there is a clear expectation gap, and audit fundamentally gives a reasonable opinion on historic information and doesn’t look for fraud.”
He added: “We’re not looking for fraud or the future or giving a statement that the accounts are correct.
“We’re saying they’re reasonable, we are looking in the past and we are not set up to look for fraud.”
However, Rachel Reeves, BEIS committee chairwoman said, “In a shop that sells teas and cakes you’d think that sort of thing might be spotted.
“It’s not a multi-national complex organisation.”
Three-time bankrupt Domini Chappell, who famously bought BHS for £1 was also advised by Grant Thornton. BHS later collapsed.