KPMG to probe Baker Tilly work at Sanctuary

KPMG to probe Baker Tilly work at Sanctuary

New auditor to look at Sanctuary Group’s 2005 numbers, which Baker Tilly took exception to

KPMG is set to scrutinise the work of Baker Tilly as part of the accounting
issues at Sanctuary Group.

The Big Four firm won the contract to audit the music company at last week’s
AGM, with investors voting to ditch Baker Tilly.

As part of KPMG’s work, it will need to look at the group’s 2005 numbers,
which Baker Tilly took exception to, opening up the prospect of further wrangles
and arguments as to how Sanctuary accounts for its revenues.

Baker Tilly had said in qualifying the group’s accounts that it had
understated losses in 2005 by £15.9m.

Steve Maslin, head of assurance services at Grant Thornton, said that KPMG
might have to change some of Sanctuary’s 2005 numbers: ‘To the extent that
there’s comparable information, if it believes those comparatives are wrong.’

The move to ditch Baker Tilly has raised questions as to whether or not a Big
Four firm would have been treated in the same way.

Maslin played down the fears. ‘If there is a breakdown of trust between
auditors and management, something needs to give,’ he said. That would happen
where a Big Four firm was involved as much as with a mid-tier firm, he said.

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