Sports Direct auditor Grant Thornton quits

3188
Sports Direct shares
// Grant Thornton gives notice as Sports Direct’s auditor
// Sports Direct ask government for advice over replacing Grant Thornton
// All big four accounting firms have declined offer for tender

Sports Direct’s auditor Grant Thornton has given notice on its work for the business in the wake of a £624 million tax claim owed by the retailer.

Mike Ashley’s sports business on Tuesday told investors that Grant Thornton had provided notice to the retailer, and will not seek reappointment as the company’s auditor.

Grant Thornton will cease working as auditor for Sports Direct from September 11, when the retailer’s annual general meeting will take place.

It comes just weeks after Sports Direct’s annual results were delayed due to a €674 million (£624 million) tax claim from Belgian tax authorities.

Sports Direct said it is now in “early discussions” with the big four accountancy firms over a tender to replace Grant Thornton.

Yet due to the nature of the big four’s monopoly over the retail market, KPMG, EY and Deloitte have all said they would have conflicts due to other clients.

PWC added that it “reluctance to engage due to its ownership structure”.

According to reports in the Financial Times, Sports Direct has now asked the Department for Business, Energy and Industrial Strategy how it will act if it becomes the first major UK-listed business to fail to appoint an auditor.

Sports Direct said in its annual results that it did not believe a firm outside of the big four would be able to “cope” with its audit in the future due to an increase in its size and complexity.

Under the UK Companies Act, the secretary of state for the department for business, Andrea Leadsom, has the power to appoint an auditor to a quoted company if it fails to appoint one itself.

Click here to sign up to Retail Gazette‘s free daily email newsletter