According to regulatory filings, the Financial Reporting Council industry watchdog moved the firm from “tier one” to “tier two” supervision status last year.
Grant Thornton cut the number of PIEs it audits by more than 70% between 2016 and 2022, auditing 20 of them in 2022.
As a result, the watchdog will only conduct inspections of the firm’s “public interest entity” audits every three years, rather than every 12 months.
In recent years, Grant Thornton has also faced several regulatory fines due to deficiencies in its audit work.
In 2022, the administrators of Patisserie Valerie also settled a £200m lawsuit with Grant Thornton that alleged negligence in its audits of the café chain.
However, according to the report Sarah Rapson, executive director for supervision at the FRC, said its move from tier one to two “is not a reflection of [Grant Thornton’s] audit quality but reflects their smaller share of the PIE market”.
Grant Thornton told the Financial Times: “We are extremely proud of our quality results over the last three years and respect the regulator’s decision to include our firm in its ‘Tier 2’ category of supervision.
“The decision by the FRC has no impact on our audit strategy and our continual investment in audit quality.”
Writes Cynera Rodrick in Accountancy Today