Auditors ‘don’t look for fraud’ - Patisserie Valerie accountants

David Dunckley, CEO of Grant Thornton, told MPs that ordinary audits look solely to the past and are not set up to detect fraud.

Grant Thornton is under investigation over its auditing of Patisserie Holdings after a £40 million hole was found in the failed cafe chain’s accounts, with the group’s former finance chief having been arrested on suspicion of fraud.

In a hearing with MPs on the Business, Energy and Industrial Strategy Committee on the future of audit, Mr Dunckley said: “I can’t talk about Patisserie Valerie because there is a live investigation, which we’re co-operating with.

“But there is a clear expectation gap, and audit fundamentally gives a reasonable opinion on historic information, and doesn’t look for fraud.

“We’re not looking for fraud or the future or giving a statement that the accounts are correct. We are saying they’re reasonable, we are looking in the past and we are not set up to look for fraud.”

He said the expectation gap “needs to be fixed”, but admitted “in the real world” a sophisticated fraud would be difficult to pick up.

But committee chair Rachel Reeves said: “In a shop that sells teas and cakes you’d think that sort of thing might be spotted. It’s not a multi-national complex organisation.”