Wilko’s auditor EY is facing backlash due to its oversight of the collapsed retailer after approving the company’s accounts despite Wilko cautioning that it lacked the necessary funds to withstand a significant sales drop.
It comes as MPs on the Business Committee are set to gather on Tuesday to discuss the fate of the retailer, which collapsed into administration last month.
According to This is Money, the risk of insolvency was flagged as early as January last year, when the retailer prepared its most recent set of annual accounts, for the year to 29 January, 2022.
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The business posted a loss of £37.6m, and Wilko’s directors warned that there was a ‘material uncertainty’ over its ability to secure additional funding, which ‘cast significant doubt’ over its position to continue operating.
Bosses stated that the firm would have ‘adequate resources’ to continue operating until January 2024 and that financing could be secured before that date. However, their forecast turned out to be inaccurate when the group went bust.
Even a £40m emergency loan earlier this year from Homebase owner Hilco failed to prevent the collapse.
Despite growing doubts about its trading, Wilko’s auditors EY agreed with the directors’ assessment, and one of its senior auditors, Victoria Venning, signed off the accounts.
EY could be among several parties facing a potential grilling by MPs on the committee. Wilko’s bosses may also be called in for questioning, The Mail on Sunday reported.
Last month HMV owner Doug Putman placed a last minute bid to save Wilko.
The retail boss is understood to have been engaged in talks with the discount retailer’s administrators from PwC with an offer which could rescue 3,000 to 4,000 jobs, as well as roughly half of its 400 stores.
However, the BBC has reported that Putman’s offer is unlikely to meet legal requirements.
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