Accountancy firm Grant Thornton has been served notice of an accountancy professional negligence claim in relation to advice and audit services it gave to Manchester Building Society (MBS) over the “the implementation and application of hedge accounting”. If the case is not settled at an early stage, MBS’s lawyers have given every indication that they are prepared to take the case through the courts.
The advice given by Grant Thornton has already attracted the interest of regulators, who have said that they will be investigating the firm in relation to possible breaches of various rules, while the Financial Reporting Council (FRC) has said that it will look into a number of separate matters related to MBS, Grant Thornton and interest rate swaps – an investigation which will again cast the spotlight on the integrity of the accountancy firm.
The accountancy professional negligence claim argues for £49 million in compensation because of breach of contract, negligence and breach of statutory duty relating to audit services and advice provided from 2006 up to and including 2013 when Grant Thornton resigned as MBS’s external auditors.’
Earlier this year the FRC expressed its disappointment that five out of eight Grant Thornton audits it looked into were found to fall short of the expected standard.
Although Grant Thornton acknowledged it was currently facing an accountancy professional negligence claim it said “obligations of confidentiality mean that we cannot comment on the detail of any litigation in which the firm is involved”.
It is not only large organisations that can make claims for loss caused by the negligence of an account. For information about the many services provided by the specialist accountancy and financial services professional negligence lawyers at Healys LLP of Brighton and London click here.