Accounting watchdog slaps Laura Ashley’s auditor with fine and temporary ban over botched work for retailer
Botched work: Laura Ashley became the first major victim of the pandemic when it went bust in March 2020
The accounting watchdog has slapped Laura Ashley’s auditor with a fine and temporary ban over its botched work for the retailer.
The Financial Reporting Council (FRC) banned UHY Hacker Young from auditing public companies until at least May 2024.
It hit UHY with a ‘severe reprimand’ and a £217,500 fine over its auditing of fashion and furnishings retailer Laura Ashley before it failed. UHY partner Martin Jones was fined £32,625 and barred from auditing public companies for two years.
Laura Ashley became the first major victim of the pandemic when it went bust in March 2020.
At the time it had 155 stores in the UK and 2,700 staff. Before the collapse its annual losses jumped tenfold from £1.4m to £14m in the year to June 2019. But the annual report did not flag up concerns about its ability to remain in business.
The FRC said UHY and Jones admitted ‘serious breaches’ of their requirement to ensure the reports were accurate.
Deputy executive counsel Jamie Symington said the auditors failed to ‘adequately challenge or investigate’ Laura Ashley’s assertions it would remain in business for the foreseeable future.
UHY said: ‘Audit quality is a key focus and priority for UHY Hacker Young, but we recognise that the audits relating to Laura Ashley Holdings for the financial years 2018 and 2019 fell below the high standards that we set for ourselves.’
It said the collapse was caused by the pandemic.
Laura Ashley was founded in 1953 by the eponymous fashion designer and her husband Bernard, growing into a global brand. Celebrity fans included Princess Diana, who wore it through the 1980s.
It was plucked out of administration by restructuring and investment firm Gordon Brothers and has returned to the High Street via a deal with Next, which sells its homeware at more than 500 stores.
Laura Ashley also has 48 stores in the UK and is sold online.