Grant Thornton International

Last updated

Grant Thornton International Ltd.
Company typeGlobal network of independent member firms
Industry Professional services
Founded1980;44 years ago (1980)
HeadquartersGTIL: 30 Finsbury Square, London, England, U.K. [1]
Key people
Peter Bodin (CEO)
Products Assurance services, tax advisory, specialist advisory services, and management consulting
RevenueIncrease2.svgUS$7.2 billion (2022) [2]
Number of employees
68,000 (2022)
Website grantthornton.global

Grant Thornton is the world's seventh-largest by revenue and sixth-largest by number of employees professional services network [3] of independent accounting and consulting member firms which provide assurance, tax and advisory services to privately held businesses, public interest entities, and public sector entities. Grant Thornton International Ltd. is a not-for-profit, non-practising, international umbrella membership entity organised as a private company limited by guarantee. Grant Thornton International Ltd. is incorporated in London, England, and has no share capital.

Contents

According to Grant Thornton International Ltd (GTIL), member firms within the global organisation operate in 147 markets employing over 68,000 personnel for a combined global revenue of US$7.2 billion. [4]

History

20th century

The earliest origins of the name date back to 1904, when the UK firm of Thornton and Thornton was formed in Oxford. Through a series of name changes this firm merged in 1959 with another UK firm, Baker & Co, which traced its origins to 1868, to form the firm Thornton Baker. In 1975 Thornton Baker merged with Kidston, Jackson, McBain, a UK firm which traced its origins to the Glaswegian accountant, Robert McCowan, who set up in practice in 1844, and was a founder of the Institute of Accountants and Actuaries in Glasgow in 1853.

In the US, 26-year-old Alexander Richardson Grant founded Alexander Grant & Co in Chicago in 1924. Grant had been a senior accountant with Ernst & Ernst (now EY). Alexander Grant was committed to providing services to mid-sized companies.

When Grant died in 1938, Alexander Grant & Co survived the change in leadership and continued to grow nationally. In 1969, Alexander Grant & Co joined with firms from Australia, Canada, and the United States to establish the organisation of Alexander Grant Tansley Witt. This organisation operated successfully for 10 years.

In 1980 Alexander Grant & Co and Thornton Baker, firms with similar qualities, clients, personnel numbers and values, joined with 49 other firms to form a global organisation, Grant Thornton. In 1986, Alexander Grant & Co and Thornton Baker changed their names to Grant Thornton, reflecting their mutual affiliation and strategic alignment. [5]

21st century

In December 2019 Grant Thornton placed in the top 50 global employers for diversity and inclusion (D&I), according to a new index developed by Universum. [6] More than 247,000 business and engineering/IT students rated Grant Thornton against support for gender equality, commitment to diversity & inclusion and respect for its people. Their perception of Grant Thornton, against these three categories, places the network 28th in the list, alongside some of the world's most well-known and respected global brands.

In 2018 Grant Thornton UK LLP, the UK member firm of the network, was fined £4 million for audit misconduct after a former partner joined the audit committees of two organisations while Grant Thornton UK LLP was still auditing them. [7] Later that year, for unrelated reasons, Grant Thornton UK LLP's chief executive Sacha Romanovitch, their first female chief executive, announced she would step down. [8]

In September 2019, Grant Thornton (along with other defendants) entered into a settlement agreement with VEREIT stockholders to settle pending class action litigation against Grant Thornton regarding among other things alleged violations of Section 11 of the 1933 Act (In re American Realty Capital Properties, Inc. Litigation and the remaining opt-out actions), at a cost to Grant Thornton of $49 million. [9] [10] [11] [12]

Recently the US firm in the network declared their highest turnover in history of $1.9 billion which was a YoY increase of 5.4% over the previous year. [13]

In January 2024, the company announced the appointment of Malcolm Gomersall as its new chief executive, replacing David Dunckley who stepped down earlier in the same month. [14] [15]

Recent significant mergers

Although many of the firms now carry the Grant Thornton name, they are not all members of one international partnership. Each member firm [22] is a separate national entity, and governs itself and manages its administrative matters independently on a local basis. This is similar to other professional services networks.

Member firms

Grant Thornton member firms service international work through their local International Business Centres — located in 40 major commercial centres throughout the world.

Grant Thornton International Ltd. carries out an annual global research project: The Grant Thornton International Business Report, [23] which (since 1992) surveys the views and expectations of over 10,000 privately held mid-market businesses across 28 economies.

Controversies and criticisms

Nichols plc and the University of Salford

In 2018, the UK's FRC fined Grant Thornton £4m, later reduced to £3m, for misconduct over its audits of Nichols plc and the University of Salford. Three partners were given personal fines of £60,000. [24]

Patisserie Valerie

In 2021 the FRC fined Grant Thornton £4m for failures in its audits of Patisserie Valerie. The £4m fine was reduced to £2.34m, mainly due to Grant Thornton’s co-operation with the investigation. The auditor responsible, David Newstead, was also fined £150,000, reduced to £87,750, and was banned from carrying out audits for three years. [25]

Grant Thornton had lost the audit of Patisserie Valerie in 2019 after it failed to spot a £94m accounting black hole in its books, thereby triggering an investigation by the FRC. [26] Patisserie Valerie went into liquidation in January 2019. Later, the chain was found to have overstated its cash position by £30m and failed to disclose overdrafts of nearly £10m. The liquidation lead to the closure of 70 stores and more than 900 job losses.

The company's chief executive, David Dunckley, told UK Members of Parliament it was not his firm's job to uncover fraud or to judge whether a company's financial figures were correct. Discussing the company's failure to uncover fraud at Patisserie Valerie, he said: “If people are colluding and there is a sophisticated fraud, that may not be caught by normal audit procedures.” Rachel Reeves MP said “But in a shop that sells tea and cakes, you’d sort of think that might be spotted. It’s not a multinational complex organisation.” She also said that the FRC's rules require auditors to spot material misstatements where they are due to fraud or error. [27]

Restructuring firm FRP Advisory investigated whether it could claim against Grant Thornton for failures to identify suspected wrongdoing with Patisserie Valerie accounts, and in November 2020, it issued a claim for damages against Grant Thornton in respect of "negligent audits" of the group companies' financial statements. [28]

Interserve

In 2019 the FRC instituted an investigation into Grant Thornton's audits of the failed outsourcing company Interserve between 2015 and 2017. Interserve had amassed debts of £738m following numerous acquisitions, a failed probation service contract and an investment in energy-from-waste plants. [29] Grant Thornton and the partner involved were fined £1.3m by the FRC in 2021 for 'scepticism failure'. [30]

£650,000 fine for the audit of an unnamed company

The FRC fined Grant Thornton £650,000 over a series of errors in its 2016 audit of an unnamed company. It found that the auditor had failed to adequately gauge the true value of the company's assets, before flagging them as a “significant risk”. The regulator said the firm had selected too small a sample size and had placed “undue reliance” on the externally appointed experts rather than its own specialist. The FRC also said the auditor had failed “to exercise sufficient professional scepticism and to prepare adequate audit documentation.” [31]

Sports Direct

The FRC conducted an investigation into Grant Thornton's 2016 audit of Sports Direct. The sports retailer used Barlin Delivery to deliver merchandise to its customers, and in the process made large undisclosed payments to Barlin, which was owned by John Ashley, the brother of Sports Direct's owner Mike Ashley. The FRC examined Grant Thornton's failure to disclose the relationship between Sports Direct and Barlin. [32] In 2020 the UK Court of Appeal determined that Sports Direct did not have to disclose 40 documents sought by the FRC because they were covered by legal privilege. [33]

Conviviality Retail

The FRC fined the company £1.95m for ethical failures after it tried to conceal evidence of involvement in the audit of the failed alcohol retailer Conviviality Retail. The regulator found that the company had not maintained an independent stance during the audit and had committed “firm-wide” ethical failings between 2014 and 2017. Senior manager Natasha Toy was severely reprimanded after she tried to remove an entry from the audit file which indicated involvement. [34]

Assetco

Grant Thornton was ordered pay £21 million, the second-largest award against a UK auditor, in damages to its former client AssetCo, a fire engine leasing company, plus £5 million to pay Assetco's legal costs. The judge found it had committed negligence “of the utmost gravity”. An appeal judge reduced the damages to £20.8m, before a 25% deduction for contributory negligence. [35]

Brighthouse liquidation

After being appointed as the liquidator of the failed retailer Brighthouse, Grant Thornton was accused of maximising returns to creditors at the expense of vulnerable customers. The company was found to be offering the 140,000 rent-to-own customers an initial 28-day payment holiday, one-third of the period recommended by the FCA. Mick McAteer, co-founder of the Financial Inclusion Centre thinktank, said: “There is a potential conflict between the interests of the administrator – and those they represent – and the vulnerable customers who owe money to BrightHouse." [36]

Corruption

In September 2022, Western Australia's Corruption and Crime Commission (CCC) found that Grant Thornton Australia had bribed senior public servants to secure lucrative consulting work from the state government. A CCC report found that two senior officials in the Department of Communities had been given over $100,000 worth of alcohol, meals, gifts, sporting tickets, flights and accommodation. Additionally, Grant Thornton employed a family member of one of the public servants in a no-work job. In return, the public servants breached state government procurement policies, including by engaging in bid rigging, ultimately directing $2.1 million in consulting work to Grant Thornton. [37] [38]

See also

Related Research Articles

The Big Four are the four largest professional services networks in the world: Deloitte, EY, KPMG, and PwC. They are the four largest global accounting networks as measured by revenue. The four are often grouped because they are comparable in size relative to the rest of the market, both in terms of revenue and workforce; they are considered equal in their ability to provide a wide scope of professional services to their clients; and, among those looking to start a career in professional services, particularly accounting, they are considered equally attractive networks to work in, because of the frequency with which these firms engage with Fortune 500 companies.

<span class="mw-page-title-main">Ernst & Young</span> Multinational professional services network

Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and PwC, it is considered one of the Big Four accounting firms. It primarily provides assurance, tax, information technology services, consulting, and advisory services to its clients.

<span class="mw-page-title-main">KPMG</span> Multinational professional services and accounting company firm

KPMG International Limited is a multinational professional services network, and one of the Big Four accounting organizations, along with Ernst & Young (EY), Deloitte, and PwC. The name "KPMG" stands for "Klynveld Peat Marwick Goerdeler". The initialism was chosen when KMG merged with Peat Marwick in 1987.

<span class="mw-page-title-main">PwC</span> Multinational professional services brand

PricewaterhouseCoopers International Limited is a multinational professional services brand of firms, operating as partnerships under the PwC brand. It is the second-largest professional services network in the world and is considered one of the Big Four accounting firms, along with Deloitte, EY and KPMG.

Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is a multinational professional services network. Deloitte is the largest professional services network by revenue and number of professionals in the world and is considered one of the Big Four accounting firms along with EY, KPMG and PwC.

<span class="mw-page-title-main">Information Commissioner's Office</span> Non-departmental public body

The Information Commissioner's Office (ICO) is a non-departmental public body which reports directly to the Parliament of the United Kingdom and is sponsored by the Department for Science, Innovation and Technology. It is the independent regulatory office dealing with the Data Protection Act 2018 and the General Data Protection Regulation, the Privacy and Electronic Communications Regulations 2003 across the UK; and the Freedom of Information Act 2000 and the Environmental Information Regulations 2004 in England, Wales and Northern Ireland and, to a limited extent, in Scotland. When they audit an organisation they use Symbiant's audit software.

Grant Thornton LLP is the American member firm of Grant Thornton International, the seventh largest accounting network in the world by combined fee income. Grant Thornton LLP is the sixth largest U.S. accounting and advisory organization. The firm operates 59 offices across the US with approximately 8,500 employees, 550 partners, and produces annual revenue in excess of US$1.9 billion.

<span class="mw-page-title-main">Carillion</span> British construction company, 1999–2018

Carillion plc was a British multinational construction and facilities management services company headquartered in Wolverhampton in the United Kingdom, prior to its liquidation in January 2018.

<span class="mw-page-title-main">Interserve</span>

Interserve is a British construction and support services business based in Reading, Berkshire, which went into administration in 2019 and which is expected to be wound up in 2024. At that time, the group generated revenue of £2.2 billion and had a workforce of 34,721 people.

<span class="mw-page-title-main">RSM International</span> Multinational network of accounting firms

RSM International, branded RSM since 2015, is a multinational network of accounting firms forming the sixth-largest accountancy professional services network in the world by revenue. RSM's member firms are independent accounting and advisory businesses, each of which practices in its own right and is unified as part of the network.

RSM Robson Rhodes LLP was a partnership of chartered accountants in the United Kingdom and Ireland. It was the UK member firm of RSM Global, the 6th largest network of professional accountancy firms in the world. With offices throughout the UK and Ireland, the firm offered auditing, consultancy and tax services to a wide variety of organisations in the private and public sectors.

RSM Tenon was a professional services firm based in the United Kingdom, which was listed on the FTSE SmallCap Index and part of RSM Global. The company was formed from the merger of the Tenon Group with RSM Bentley Jennison in December 2009.

Mazars is an internationally integrated partnership, specialising in audit, accounting and consulting group employing more than 47,000 professionals in more than 95 countries through member firms. With head offices in Paris, France, Mazars has a network of correspondent partners and joint ventures in a further 21 countries and is a founding member of the Praxity alliance, a network of independent firms.

Hitachi Consulting Corporation was an American international management and technology consulting firm with headquarters in Dallas, Texas. It was founded in November 2000 as a subsidiary of the Japanese corporation Hitachi, and employed approximately 6,500 people in the US, Japan, Brazil, China, India, Portugal, Singapore, Spain, the UK, Germany, and Vietnam.

An accounting network or accounting association is a professional services network whose principal purpose is to provide members resources to assist the clients around the world and hence reduce the uncertainty by bringing together a greater number of resources to work on a problem. The networks and associations operate independently of the independent members. The largest accounting networks are known as the Big Four.

<span class="mw-page-title-main">Baker Tilly International</span> Consulting and Public Accounting Firm

Baker Tilly International is a consulting and public accounting firm. It is currently the 9th largest accounting network in the world by revenue with 41,000 people in 700 offices across 145 territories with combined global revenues of $4.7bn. Baker Tilly International operates geographically through four regions: Asia Pacific; Europe, Middle East and Africa; Latin America; and North America. Each region has a chair, appointed by the International Board, who leads an advisory council elected by members in that region.

Saffery is a firm of chartered accountants in the United Kingdom. It has nine offices across the UK as well as offshore. The firm acts for clients across specialty sectors including private wealth, landed estates and rural businesses, not-for-profit, entrepreneurs, sports and entertainment.

<span class="mw-page-title-main">Patisserie Valerie</span> Chain of cafes in the United Kingdom

Patisserie Valerie is a chain of cafés that operates in the United Kingdom. The chain specialises in cakes, and its menu includes continental breakfasts, lunches and teas and coffees. The company went into administration in January 2019, prior to a management buyout funded by Causeway Capital Partners, an Irish company.

<span class="mw-page-title-main">BDO Global</span> International network of professional service firms

BDO is an international network of public accounting, tax, consulting and business advisory firms that provide professional services under the name BDO. It is the fifth-largest accounting network in the world. Global fee income of the member firms in the network for the year ended 30 September 2021, including the members of their exclusive alliances, totaled US$12.8 billion. Each BDO member firm is an independent legal entity in its own country. The network, founded in 1963 as Binder Seidman International Group by firms from Canada, Germany, the Netherlands, the UK and the US, is coordinated by BDO Global Coordination B.V., with an office in Zaventem, Belgium. In 1973, the organisation adopted the name BDO, made up from the initials of the three founding firms: Binder (UK), Dijker (Netherlands) and Otte (Germany).

The Audit, Reporting and Governance Authority is a proposed Audit regulator intended to be established in the United Kingdom to replace the Financial Reporting Council. The government announced plans for a new regulator in March 2019, and published detailed proposals in March 2021; the new regulator was expected to be fully implemented in 2023 but is delayed without a clear timetable.

References

  1. ↑ "Contact us - Grant Thornton International". Grant Thornton International Ltd. Home. Retrieved 17 January 2023.
  2. ↑ "Grant Thornton grows global revenues by 13.7%* to a record USD7.2 billion". www.grantthornton.global. Grant Thornton International Ltd. Retrieved 9 February 2023.
  3. ↑ Smith, Philip. "Top 20 International Networks 2018". www.accountancyage.com. Accountancy Age. Retrieved 18 February 2019.
  4. ↑ "PRESS RELEASE - Grant Thornton grows global revenues by 13.7%* to a record USD7.2 billion". www.grantthornton.global. Grant Thornton International Ltd. Retrieved 9 February 2023.
  5. ↑ "History of Grant Thornton LLP - Grant Thornton LLP". Archived from the original on 7 April 2012. Retrieved 4 March 2012.
  6. ↑ Kiersz, Andy (5 December 2019). "Gen Z business students say these are the 50 best global companies for diversity and inclusion". Business Insider. Retrieved 10 December 2019.
  7. ↑ Fino, Jessica (29 August 2018). "Grant Thornton fined £4m over audit misconduct". economia. Institute of Chartered Accountants in England and Wales. Retrieved 16 October 2018.
  8. ↑ Deans, Jason (16 October 2018). "Grant Thornton chief resigns after anonymous attack". The Guardian. Retrieved 16 October 2018.
  9. ↑ "In re American Realty Capital Properties, Inc. Litigation; Third Class Action Complaint for Violations of the Federal Securities Laws," United States District Court Southern District of New York, September 30, 2013.
  10. ↑ "VEREIT® Enters Into Agreements to Settle Pending Litigations". Yahoo. 9 September 2019.
  11. ↑ Kelly, Bruce (9 September 2019). "Nicholas Schorsch's former flagship REIT settles with investors for $1 billion". Investment News.
  12. ↑ Heller, Matthew (9 November 2017). "Ex-American Realty CFO Gets 18 Months in Jail". CFO.
  13. ↑ "Grant Thornton reports record revenue of $1.9B". Accounting Today. 23 September 2019. Retrieved 25 September 2019.
  14. ↑ Hosking, Patrick (24 January 2024). "Grant Thornton names Malcolm Gomersall as new UK boss". ISSN   0140-0460 . Retrieved 24 January 2024.
  15. ↑ "Grant Thornton UK chief David Dunckley steps down". www.ft.com. Retrieved 24 January 2024.
  16. ↑ "Auditors join forces to take on Big Four", The Daily Telegraph, 28 April 2007.
  17. ↑ Angela Ceroni. "Grant Thornton International Ltd. Home". gti.org. Archived from the original on 11 September 2012.
  18. ↑ Angela Ceroni. "Grant Thornton International Ltd. Home". gti.org. Archived from the original on 1 August 2012.
  19. ↑ "Merger of equals as Grant Thornton and PKF in Johannesburg join forces to create a formidable client service offering". gt.co.za.
  20. ↑ "SizweNtsalubaGobodo joins Grant Thornton network". Grant Thornton South Africa: An instinct for growth. Retrieved 27 August 2018.
  21. ↑ "Grant Thornton completes significant expansion in Japan".
  22. ↑ Grant Thornton International Limited Member firms Archived 23 July 2011 at the Wayback Machine
  23. ↑ "Press release: 16 Jan 2023". www.grantthornton.global. Grant Thornton International Ltd. Retrieved 9 February 2023.
  24. ↑ "Grant Thornton fined £3m for misconduct over audits". BBC. 29 August 2018. Retrieved 2 September 2020.
  25. ↑ "Grant Thornton fined £4m for Patisserie Valerie scandal". BBC News. 27 September 2021. Retrieved 27 September 2021.
  26. ↑ "RSM replaces Grant Thornton as Patisserie Valerie auditor". consultancy.uk. 15 January 2019. Retrieved 13 April 2019.
  27. ↑ Kollewe, Julia; Butler, Sarah (30 January 2019). "Ex-Patisserie Valerie auditor says 'not his role to uncover fraud'". The Guardian. ISSN   0261-3077 . Retrieved 2 September 2020.
  28. ↑ Price, Katherine (23 November 2020). "Patisserie Valerie liquidators hit auditor with lawsuit". The Caterer. Retrieved 30 December 2020.
  29. ↑ "Grant Thornton investigated over Interserve's accounts". www.independent.co.uk. Retrieved 2 September 2020.
  30. ↑ "Interserve auditors fined £1.3m for 'scepticism failure'". The Construction Index. 1 November 2021. Retrieved 2 November 2021.
  31. ↑ "Grant Thornton fined £650,000 by FRC over inadequate audit". Financial Times. 10 December 2019. Retrieved 2 September 2020.
  32. ↑ "Grant Thornton comes under scrutiny for Sports Direct role". www.consultancy.uk. 19 February 2019. Retrieved 2 September 2020.
  33. ↑ "FRC loses legal challenge over Sports Direct documents | Accountancy Daily". www.accountancydaily.co. Retrieved 2 September 2020.
  34. ↑ Sim, Bérengère. "FRC whacks Grant Thornton with £1.95m fine for ethical failures". www.fnlondon.com. Retrieved 2 September 2020.
  35. ↑ "Grant Thornton loses appeal over £22.6m damages | Accountancy Daily". www.accountancydaily.co. Retrieved 2 September 2020.
  36. ↑ correspondent, Kalyeena Makortoff Banking (30 August 2020). "Rent-to-own BrightHouse accused of sidestepping Covid payment guidance". The Guardian. ISSN   0261-3077 . Retrieved 2 September 2020.
  37. ↑ Clarke, Tim (20 September 2022). "Department of Communities scandal: CCC claims Kerry Ravi, Maria Irdi favoured firms in return for lavish perks". The West Australian. Retrieved 20 September 2022.
  38. ↑ "A report on corrupt procurement practices and conduct in the Department of Communities" (PDF). Corruption and Crime Commission. 20 September 202. Retrieved 20 September 2022.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.