Big Four accountant Deloitte hit by investigation into audit of collapsed fashion company Joules
Regulators are investigating Deloitte over the audit of retailer Joules, which collapsed last year.
The Financial Reporting Council (FRC) has launched an investigation into an audit of the High Street chain’s financial statements for the year to 30 May 2021.
The Big Four accounting firm could face a hefty fine from the regulator if found to be non-compliant.
Failed audit: Fashion retailer Joules plunged into administration last year after struggling with rising costs and declining customer demand
London-based Deloitte said it would “fully cooperate” with the investigation.
The company added that it was “committed to the highest standards of audit quality.” Joules was bailed out of administration when retail giant Next bought most of the company’s assets for £34 million in December.
The beleaguered retailer, known for selling colorful rubber boots and floral dresses, is grappling with rising costs and declining customer demand.
Deloitte is the latest company questioned by the FRC over an audit of a company that has collapsed, with a slew of active investigations, including EY’s audit of online sofa retailer Made and PwC’s audit of shopping mall giant Intu.
Deloitte is also under investigation for its audits of GoAhead Group, owner of the GTR franchise that operates Thameslink, Southern, Great Northern and Gatwick Express trains and car dealership Lookers.
- The headline of this article has been amended to clarify that no conclusions have been drawn regarding Deloitte’s audit.