Accountancy Firm Steps Down Over Unpaid Taxes
- Grant Thornton set to quit as Sports Direct auditor due to concerns over €674m tax bill
- Financial Times reports Grant Thornton informed UK regulator The Financial Reporting Council of its intention to step down
- Sports Direct dismissed rumors of replacing the accountancy firm in a trading update
- Underlying EBITDA decreased by 6% to £287.8m, excluding House of Fraser it would have increased 10.9% to £339.4m
- Sports Direct faces issues such as underinvestment in stores and excessive outsourcing
Accountancy firm Grant Thornton is set to quit as the auditor for Mike Ashley’s Sports Direct following concerns over a €674m (£605m) tax bill. The Financial Times reported that Grant Thornton informed the UK regulator, The Financial Reporting Council, of its intention to step down due to being notified of the tax bill from Belgian authorities just hours before signing off on the results last Friday (26 July). Sports Direct dismissed rumors that it was seeking to replace the accountancy firm. In a trading update, it noted ‘inaccurate reports’ of an audit tender process in 2019 and added that this was ‘not the case’. The company revealed issues such as underinvestment in stores, excessive outsourcing, and selling brands to its Chinese parent shortly before administration. Both Grant Thornton and Sports Direct declined to comment on the reports.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Grant Thornton’s decision to quit as auditor for Sports Direct due to concerns over a large tax bill, mentions the involvement of the Financial Reporting Council, and discusses Sports Direct’s financial performance. It also includes quotes from both parties involved but lacks personal opinions or sensationalism.
Noise Level: 3
Noise Justification: The article provides relevant information about a significant event in the business world – an auditing firm leaving a major client due to concerns over a large tax bill. It also includes some analysis of Sports Direct’s financial performance and challenges faced by the company. However, it could benefit from more context and evidence to support its claims.
Financial Relevance: Yes
Financial Markets Impacted: Sports Direct
Financial Rating Justification: The article discusses an accounting firm leaving its position as auditor for a company, which could impact the company’s financial reporting and potentially affect investor confidence. Additionally, it mentions the company’s financial performance and issues faced by the company.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
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