Sports Direct has revealed that its auditor Grant Thornton is set to quit working for the retail giant leaving it without an auditor.
The sports retailer, which is owned by Newcastle United owner Mike Ashley, told investors that the accountancy firm has handed in its notice to quit as its auditor.
Grant Thornton will stop working for Sports Direct on September 11, on the day of the retailer鈥檚 annual general meeting.
The accountancy firm鈥檚 decision to quit comes a day after Sports Direct released its annual report which stated that the group鈥檚 intention was to ask its shareholders to approve Grant Thornton鈥檚 position as auditor for another year
Grant Thornton鈥檚 decision to quit has put Sports Direct in a tricky situation. The retailer told investors that it does not believe that a firm outside of the Big Four - Deloitte, KPMG, EY, and PwC -聽 would be capable of handling the work. However, the Big Four have so far shown reluctance to work with the company.
In Sports Direct鈥檚 annual report, the company said: 鈥淥ur early discussions with the Big Four have thrown up some barriers; Deloitte who do our tax compliance and advisory work cannot perform audit work at the same time and thus would currently be unable to tender.
鈥淜PMG have indicated conflicts of interest based on an existing portfolio of clients, however we do not believe based on our understanding of Big Four independence procedures that this is insurmountable.
鈥淓Y had some reluctance based on their close proximity to the House of Fraser administration which they ran. However as time has passed we do not believe this should be a barrier when a tender process is run.
鈥淧wC have had some widely publicised fines in recent years and we understand there is a reluctance to engage based on our ownership structure.鈥
Sports Direct recently revealed that it was hit with a 鈧674m (拢605m) tax bill related to its activities in Belgium. The unexpected bill caused the company to delay releasing its financial accounts and led to a review being launched into Grant Thornton鈥檚 work by the Audit Quality Review Team.
