According to Sky News three out of the ‘big four’ accounting firms have declined to take up the role due to potential conflicts of interest and reputational issues relating to the company’s corporate governance.
The fourth big accounting firm Deloitte is rumoured to have also declined the role, although Sky News revealed that there has been no official confirmation that is the case.
KPMG is believed to have decline due to the fact it currently audits JD Sports, Sports Direct’s main competitor and EY was concerned about the potential conflict of interest after recently acted as administrator to House of Fraser.
Grant Thornton, which has held the role since before the company floated on the London Stock Exchange in 2007 stepped down after Phil Westerman, the partner at Grant Thornton responsible for signing off Sports Direct’s accounts, has undertaken the work for five years and is obliged to step aside to preserve the independence of the firm’s work.
Sports Direct said it had “requested” Westerman’s term be extended by one year to cover the FY19 audit and that it intended to appoint a successor by the end of 2018.
It said: “We have made the FRC aware of our intentions and have consulted with our major shareholders over the extension of his term, who have been supportive of this, subject to the necessary procedures to ensure this remains compliant with the Ethical Standard requirements.”