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Ian Carrotte of ICSM slams what happened at Patisserie Valerie: 'there's something rotten at the heart of these audits'

ICSM’s Ian Carrotte said history keeps repeating itself as accountants give doomed firms a clean bill of health.

“It happened with Carillion and Thomas Cook and it’s happened with Patisserie Valerie,” he said, “There’s something rotten at the heart of these audits as over and over again the so-called experts fail to see black holes in the accounts they are supposed to audit. How can they miss such obvious flaws in a firm’s accounts?”

The accountants Grant Thornton who audited Patisserie Valerie’s accounts before their collapse have been fined £2.3m by the industry regulator Financial Reporting Council for failing to pick up ‘red flags’ in the café’s books. Accountant David Newstead has been fined £150,000 for his role in signing off the numbers.

Patisserie Valerie’s liquidators FRP Advisory have made a civil claim against Grant Thornton for negligence adding to the complexities of the collapse. They point to the fact the directors and auditors had failed to spot the company’s accounts were fantasy with ‘undisclosed’ loans of £10m while Patisserie Valerie said it had £30m in cash.

Ian Carrotte said it was just not believable that those who ran the firm were unaware of the situation. “There’s no way the auditors and directors were not aware of the errors,” he said, “the whole thing stinks as it was the suppliers and workforce who paid for the collapse in the short term. I know the Fraud Office were called in and there were arrests but having a £90m black hole in your accounts is highly suspicious.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk