Outgoing Grant Thornton boss defends firm’s audit quality as Patisserie Valerie probe is launched
The outgoing head of accountancy firm Grant Thornton has admitted she had made mistakes in her leadership, but stood by the quality of the firm’s auditing, amid fresh questions over Patisserie Valerie.
Sacha Romanovitch, who will step down at the start of next month after 28 years at the firm, took the dramatic decision last month not to stand for another term in charge of Britain’s fifth-largest auditor following a partner insurrection in which she was accused of pursuing a “socialist agenda”.
“Of course I’ve made mistakes,” she told an audience today at an event hosted by the Centre for Enterprise, Markets and Ethics, saying she has not been clear enough in communicating changes to the firm – including its move away from a partnership model – that occurred under her watch. “In hindsight… I would have anchored those more clearly,” she said.
Read more: The six big ideas that could fix auditing
She defended the firm’s audit standards – currently under scrutiny because of its role as auditor at cafe chain Patisserie Valerie, which recently discovered a £40m hole in its finances. Yesterday, accountancy watchdog the Financial Reporting Council said it was investigating Grant Thornton’s role in the case.
“We do over 10,000 audits a year, and sometimes there are situations where businesses fail,” she said.
In a wide-ranging speech, Romanovitch advocated for a more inclusive approach to capitalism, calling for public and private spheres to collaborate to find ways to get people contributing to the economy, and addressing issues such as climate change.
She stressed the need for “political will” to combat money-laundering in the UK, claiming Grant Thornton had turned down “quite significant amounts of business” during her tenure because it was unhappy with clients’ ethical standards.
Read more: The audit sector faces a perfect storm
Addressing current disruptions in UK audit, which is a facing a series of reviews, she said she would not “defend the indefensible”, but argued the sector could benefit from acting more like the airport industry, saying firms should collectively review failures and share learning.
Romanovitch will step down at the end of next week, and be replaced by Dave Dunckley, a long-standing member of the firm who she described as a “really good guy”. When she steps down, the UK will be left without a female leader at any of its major audit firms. She has yet to announce what her next move will be.