EY, the auditor of Wilko, has reportedly come under fire for signing off the retailer’s accounts despite the firm warning that it did not have enough funds to cope with a sharp drop in sales.
According to reports from This is Money, Wilko has been at risk of insolvency since January 2022, when the company was finishing its most recent set of accounts for the year to 19 January 2022.
The company posted a £37.6m loss and directors warned that there was a ‘material uncertainty’ because it had not been able to secure additional funding, which ‘cast significant doubt’ over its ability to continue as a going concern.
Despite this the bosses stated that the company would be able to survive till at least January 2024 and additional funding would be able to be secured in the meantime.
Regardless of growing doubts about its financial health and mounting losses, Wilko’s auditors EY agreed with the directors’ assessment.
EY stated that the directors’ methods were “appropriate” despite acknowledging that a “material uncertainty” existed about its viability as a going concern. EY was paid £269,000 for its services.
Even a £40m emergency loan earlier this year from Homebase owner Hilco failed to prevent the collapse.
Doug Putman, the billionaire businessman who rescued HMV, has since emerged as a frontrunner in the race to save Wilko.
Retail Sector has approached EY for comment.
