Grant Thornton Probed Over U.K. Audit of Manchester LenderBen Moshinsky
The U.K. accounting regulator is investigating Grant Thornton LLP’s audit of Manchester Building Society over the way it recorded interest-rate swaps, which led to an adjustment in its financial statement.
The Financial Reporting Council is probing the Manchester, England-based lender’s accounts for 2012, the regulator said in a statement on its website today.
“The decision to investigate follows information received from the Prudential Regulation Authority in relation to the conduct of the auditors at the time,” the FRC said in the statement.
Manchester Building Society “decided to alter the accounting treatment of its long-term mortgage book and related interest rate hedges” last year, according to a statement on its website. It restated its 2011 retained earnings by a decrease of 28.7 million pounds ($43.9 million) to 9.7 million pounds, the lender said.
Christopher Gee, finance director at Manchester Building Society didn’t immediately respond to voicemails seeking comment.
Grant Thornton “alerted the regulator as soon as we became aware of a potential issue,” the firm said in an e-mailed statement.
Grant Thornton’s audits of catering company Nichols Plc, for 2011 and 2012, are also being probed by the accounting regulator, the FRC said on its website. Earlier this year the FRC opened two separate investigations into KPMG LLP, examining its audits of a car-seller and the conduct of one of its partners.