// Mike Ashley’s Sports Direct appoints RSM as its new auditor
// It ends a 6-week hunt for new accountants after Grant Thornton resigned in September
// This means Sports Direct avoids government intervention or possible suspension from the stock market
Sports Direct has appointed RSM as its new auditor, ending a six-week hunt for new accountants after Grant Thornton resigned in September.
The appointment comes after the retailer scrambled to find a new auditor to avoid government intervention or possible suspension from the London Stock Exchange.
The company – which owns the eponymous Sports Direct as well as House of Fraser, Game, Jack Wills and Evans Cycles – will become RSM’s most high-profile audit client and its first in the FTSE 350.
RSM predominantly completes audit work for private companies as well as dozens of AIM-listed firms.
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It said it would start work with Sports Direct immediately.
“RSM is delighted to have won this opportunity,” RSM head of audit Jonathan Ericson said.
“We have a strong, high-quality audit practice. Our experience, investment and commitment, together with the scope and scale of our international services, mean we are ideally placed for this important public interest appointment.”
Sports Direct, which is majority-owned by retail tycoon Mike Ashley, had reportedly tapped up a number of mid-tier audit firms following Grant Thornton’s exit after 12 years as its auditor.
In its accounts, Sports Direct said it struggled to attract the Big 4 auditors – PwC, Deloitte, KPMG and EY – all of which reportedly viewed Ashley’s company as a reputational risk.
However, Ashley said that a firm outside of those four would struggle “to cope” with its audit due to Sports Direct’s size and complexity.
Grant Thornton’s resignation led to speculation that Sports Direct could become the first major UK company to fail to appoint an auditor, meaning the government may have been forced to step in.
Grant Thornton outlined its intention to resign shortly after Sports Direct’s annual results were delayed by a last-minute €674 million bill from the Belgian tax authorities.
Grant Thornton is also facing scrutiny from the UK’s peak audit regulator for its work with Sports Direct.
The Financial Reporting Council said it was investigating why Grant Thornton failed to disclose payments by Sports Direct to a company run by Ashley’s brother.