PracticeAuditAuditor questioned over fashion house

Auditor questioned over fashion house

Hacker Young faced tough questions this week over its audit of the Queen’s dressmaker Hardy Amies, Accountancy Age can reveal

Hardy Amies was hit by an alleged £350,000 fraud, as funds were siphoned from
the business, it emerged last week. Senior figures at the company are examining
whether the disappearance should have been detected during audit procedures.
There is no suggestion that Hacker Young was in any way involved with the
frauds.

In the company’s prelims last week, chairman and chief executive Andrew
Manders revealed details of a possible theft that had taken place at the company
in and before 2006.

Hacker Young audited the AIM-listed fashion house before being replaced by
Baker Tilly in 2006.

Sources familiar with the issue say Hardy Amies has met with Hacker Young to
discuss the alleged theft and the audits during the same period. Accounts for
all the relevant years were passed without qualification by Hacker Young.

The value of the funds siphoned from the business amounted to around 25% of
the company’s cash income, said a source: ‘It was akin to a hand in the till.’

A warrant has been issued for the arrest of the former financial controller
of Hardy Amies in connection with the alleged £350,000 theft.

The alleged theft was discovered after Manders had begun an exercise to
introduce stricter internal controls at the company.

‘The matter has been referred to the police and this makes it difficult to
comment in any detail, but an arrest warrant has been issued for the former
financial controller,’ said chairman and chief executive Andrew Manders.

The company posted a £2m loss for 2006, despite a growth in sales. Manders
said the company now had ‘green shoots’ from which it would soon enter into
profitability.

Hacker Young had not commented at the time of going to press.

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