Watchdog launches investigation into accountant Mazars for its audit of collapsed Studio Retail Group
The accountants who audited the books of Studio Retail Group before it collapsed and was bought by Mike Ashley are under investigation.
The Financial Reporting Council (FRC) has launched an investigation into Mazars for its work on the affected home shopping company during the year to March 2021.
Studio Retail, which sells clothes, home goods, toys and gifts, went bankrupt in February this year before being bailed out by Ashley’s Frasers Group in a £27m deal.
Questions: The Financial Reporting Council launched an investigation into Mazars for its work at Studio Retail Group during the year to March 2021
Mazars said it would “fully cooperate” with the FRC investigation.
The investigation could lead to a fine for the firm, one of the UK’s largest accountants outside of the so-called Big Four.
The FRC could also fine or sanction the individual auditors involved. Frasers Group declined to comment on the investigation because it relates to accounts from before the company’s acquisition.
It comes as Ashley prepares to leave the group at its annual meeting this month, leaving her son-in-law Michael Murray in charge.
Murray vowed to rebuild bridges with the City after years of criticism of Ashley’s management style.
Studio Retail collapsed under the pressure of high shipping costs and supply chain delays, leaving it with more inventory than normal and cash flow problems.
