Big Four Accounting Firms Turn Down Sports Direct Audit Amid Conflicts of Interest

  • Sports Direct struggles to find a new auditor
  • EY, KPMG and PwC decline due to potential conflicts of interest and reputational issues
  • Deloitte also rumored to have declined
  • Grant Thornton’s partner, Phil Westerman, had been in the role since before the company’s IPO in 2007

Sports Direct is having difficulty finding a new auditor as EY, KPMG, and PwC have all declined to take on the role due to potential conflicts of interest and reputational issues related to the company’s corporate governance. Deloitte is also rumored to have turned down the position, although no official confirmation has been made. KPMG reportedly declined because it currently audits JD Sports, a main competitor, while EY was concerned about potential conflicts after acting as administrator for House of Fraser. Grant Thornton, which had held the role since before Sports Direct’s 2007 IPO, stepped down, and Phil Westerman, the partner responsible for signing off on Sports Direct’s accounts, is obligated to step aside to maintain the firm’s independence. Sports Direct plans to extend Westerman’s term by one year and appoint a successor by the end of 2018, having consulted with major shareholders who are supportive, as long as procedures remain compliant with Ethical Standard requirements.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the situation without any clear signs of sensationalism or opinion masquerading as fact. It reports on the declining of auditing roles by EY, KPMG, and PwC for Sports Direct due to potential conflicts of interest and reputational issues, and mentions Deloitte’s rumored decline without confirmation. The article also includes information about Grant Thornton’s current role and Sports Direct’s intentions to find a successor by the end of 2018.
Noise Level: 3
Noise Justification: The article provides relevant information about the decline of EY, KPMG and PwC to audit Sports Direct due to potential conflicts of interest and reputational issues. However, it lacks in-depth analysis or exploration of the underlying reasons behind these decisions and does not offer much insight beyond reporting the news.
Financial Relevance: Yes
Financial Markets Impacted: Sports Direct and its competitors such as JD Sports
Financial Rating Justification: The article discusses accounting firms declining to audit Sports Direct, which impacts the company’s financial reporting and potentially affects its competitors in the market.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text, and the situation with Sports Direct’s audit is considered a minor issue due to potential conflicts of interest and reputational issues but does not have significant impact on public safety or infrastructure.

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