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High Street

Sports Direct approaches mid-tier firms in race for new auditor

Sports fashion retailer Sports Direct has approached mid-tier accountancy firms BDO and Mazars as it races to appoint a new auditor, according to a report by the Financial Times (FT).

FT said the retailer is aiming to avoid government intervention and a possible suspension from the London Stock Exchange (LSE) by reversing a decision to appoint a ‘Big Four’ auditor.

Grant Thornton announced it was stepping down as the retailer’s auditor on 13 August 2019, and has handled the company’s accounts since it was first floated on the LSE in 2007.

At the time, the firm said “following a review of its client portfolio” it intends not to seek reappointment as the company’s auditors and will cease to hold office as auditors with effect from 11 September 2019.

The news came after the delayed publication of Sports Direct’s annual results due to an unannounced £605m tax demand from authorities in Belgium, with reports suggesting Grant Thornton was only notified on the morning of the day the results were to be announced.

Sports direct revealed at the time that is was in “early discussions” with ‘Big Four’ accoutnancy firms as sought to find a replacement, however reports suggested KPMG, Deloitte and EY declined due to a conflict of interest including EY’s “close proximity to House of Fraser, while PWC had a “reluctance to engage based on our ownership structure”.

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