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.