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Regulator Probes UK Accounting Firm Over Greensill Audit

The U.K. entity that regulates auditors, accountants and actuaries has started a probe into Saffery Champness, a U.K. accounting firm, regarding its audit of Greensill Capital (UK) Limited’s financial statements for the year that concluded on Dec. 31, 2019, according to a Monday (June 28) statement.

The Financial Reporting Council (FRC)’s Enforcement Division will hold the investigation “under the Audit Enforcement Procedure,” according to the statement, which noted that the decision to start the probe was made during a June 15, 2021, meeting of its Conduct Committee.

The FRC said on its website that it “is a private body and is independent of Government. The FRC and its operating bodies have various responsibilities for setting, monitoring and enforcing accounting, auditing and actuarial standards and overseeing the accountancy and actuarial professional bodies.”

Separately, the Financial Conduct Authority (FCA) of the United Kingdom is probing matters connected to Greensill Capital U.K. and Greensill Capital Securities as well as Mirabella Advisers LLP’s supervision of Greensill Capital Securities, according to Nikhil Rathi, who serves as the authority’s chief executive, per a Reuters report in May.

Last year, it was reported that many large accounting firms had declined requests to audit Greensill Capital. The entity, which is headquartered in the United Kingdom, has evolved into one of the most highly valued private finance firms in the country since its 2011 founding.

Yet the Financial Times (FT) reported that Saffery Champness served as the company’s auditor in lieu of a company that is a Big Four accounting group — PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte.

Recently, Greensill said that the firm’s balance sheet had become too sizable and sophisticated for the accounting firm’s offerings, and Saffery Champness agreed, FT previously reported, citing unnamed sources.

“Any business reviews its suppliers as they grow and their needs change,” Greensill said in a statement, FT previously reported. “Greensill keeps these arrangements under review based on both value and expertise, and we undertake a competitive selection process for any new partners as needed.”

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