Torex Retail auditor earned large non-audit fees

Hurst Morrison
(HMT), the former auditor of Torex Retail, earned
substantial fees at the company for conducting non-audit work.

Torex, which last week became the subject of a Serious Fraud Office probe,
employed HMT as auditor until October 2005. HMT says that during this time it
also advised Torex on 13 acquisitions,
the FT

Torex Retail ‘s 2004 accounts show that HMT was paid £90,000 for its audit
and £512,000 for acquisition related work. It received a further £125,000 in
respect of share issues.

Corporate governance consultancy
PIRC was so alarmed by the
sums HMT was earning for non-audit work that it urged one institutional
shareholder to oppose the reappointment of HMT as auditor.

Auditors are not blocked from performing non-audit work and five years ago it
was not unusual for non-audit income to outstrip audit revenue. Since then there
has been more scrutiny in this area and the multiples have come down.

Further reading:

Torex appoints new chief exec on Deloitte’s advice

Torex saga takes new twist

Torex chief attacks his board

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