Laura Ashley auditors sanctioned over reports before its 2020 collapse

By

Nigel TAYLOR

Published
Jul 15, 2022

The auditors to fashion and homewares brand Laura Ashley before it failed in 2020 has faced sanctions and fines following “serous” breaches in accounting standards.

UHY Hacker Young and audit engagement partner Martin Jones were fined £345,000 between them and have been “severely reprimanded” by the Financial Reporting Council (FRC). 

The actions are in relation to the statutory audits of the financial statements of Laura Ashley Holdings for the financial years ended June 30 2018 and 2019.

“The breaches in this case were serious and spanned two audit years affecting multiple areas of the audits, some which were fundamental to the proper conduct of audit,” Jamie Symington, deputy executive counsel at the FRC, said in a statement.  

“These included the Auditors’ failure to adequately challenge or investigate management’s use of the going concern assumption – i.e. that the company would remain in business for the foreseeable future – despite this being identified as a significant risk for the FY2018 Audit due to the state of the retail sector.

“UHY further failed to respond appropriately to criticism of their work by the FRC’s Audit Quality Review team, leading to a repeat in the FY2019 Audit of certain breaches which occurred in the FY2018 Audit.”

UHY Hacker Young has agreed to not carry out any new audits of public companies for at least two years following the decision by the FRC.

In June 2019, Laura Ashley had 155 stores in the UK and employed more than 2,700 people. However, the group’s revenue and profits consistently declined between FY2016 and FY2019.

In March 2020, the retailer filed for administration, citing the impact of the pandemic on its business as the reason. The FRC highlighted that Laura Ashley's administration wasn't caused by the breaches.