PracticeAuditGT gave Italian arm the all clear

GT gave Italian arm the all clear

Grant Thornton International gave its Italian member firm a clean bill of health just a year before Grant Thornton SpA conducted the crucial audit at the heart of the accounting scandal engulfing food giant Parmalat.

GT fights for reputation

The last review of the Italian audit firm was completed in 2001, 12 months before the key audit of the 2002 accounts of Parmalat subsidiary Bonlat. It was in those accounts that Parmalat revealed assets had been overstated by euro3.95bn. Another review, brought forward from later this year, is underway.

Lorenzo Penca and Maurizio Bianchi, the Italian partners of Grant Thornton imprisoned in connection with the affair, worked on the audit from the establishment of Bonlat in the Cayman Islands in November 1998. They have not been charged.

GTI conducts ‘reviews’ of each of its 110 member firms at least every three years to ensure standards are up to scratch. A spokeswoman would not rule out a change to the network’s review procedure.

She added that GTI regarded its member firm reviews as ‘among the most frequent in the industry’.

Although she could not confirm whether the procedure was under active discussion, she said: ‘We will keep our review process under review.’

The reviews of member firms involve ‘a number of days on the ground with a team of people’ and includes looking at client work. It was not clear whether any of the spot checks on Grant Thornton SpA clients included Parmalat or its subsidiaries.

A Securities and Exchange Commission complaint from the end of December alleges that, on top of problems in 2003, ‘during the previous five years [1998 through 2002], Parmalat had induced US investors to purchase bonds and notes totalling approximately $1.5bn’.

Last week, Accountancy Age reported that Grant Thornton in the UK had admitted that the Parmalat scandal has inflicted ‘damage’ to the firm. A spokesman said it would, however, only be in the short term.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

14h Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

6d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter