- Companion to these volumes:
by Professors Krish Bhaskar and John Flower with Rod Sellers
Financial Reporting/Governance/Auditing events up and including 2022 (updated March 2022)
The third volume entitled:
Disruption in Financial Reporting: A Post-pandemic View of the Future of Corporate Reporting
is now out and can be found on Amazon at:
The online appendices amounting to some 150,000 words are here online:
The endnotes and references which can be clicked directly to take you to the most opf the relevant references can be found here:
Professor Krish Bhaskar writes: There is one more book to come on Disruption in Auditing with Professor Chris Humphrey (Manchester Business School) and Rod Sellers (this time as a full author as there are no conflicts of interest). This fourth volume will deal with future of Auditing, the profession and the audit firms, including a range of possible scenarios.
February 2022 Year-to-Date
Revenue recognition is once again in the news after the FRC had started investigations in to PwC over two recent audits:
Galliford Try restated its accounts two years ago by £94.3m
Kier discovered an accounting error showing its net debt was £40m higher than previously stated.
Other continuing probes include: Wyelands Bank and part of the investigation into Sanjeev Gupta’s GFG Alliance (and Liberty Commodities [auditor HW Fisher LLP]). In general the companies rescued or under Sanjeev Gupta’s current control are now possibly financially unstable with HMRC brining tax issues to court.
As an aside Krish has some sympathy for Sanjeev. Steel companies have incredibly low margins with margins as low as 2% to 3% being the norm. With the pandemic and then supply chain issues and rampant inflation will all spill any steel company into loss makings. That is not to say that Sanjeev has not used every possible way to legitimately extract as much money as he can – but that has been limited. I believe that he had good intentions in rescuing a number of steel and associated companies. (I even bid against Sanjeev at one point but was hopelessly outbid by Sanjeev).
Other PwC probes include Babcock, Eddie Stobart, and BT
Carillion and Rengernis KPMG now admitted that both companies that its auditors had “misled” regulators during inspections of audits. That said Carillion’s liquidators made a £1.3 billion legal claim against KPMG. The outcome of FRC’s investigation is ongoing.
Silentnight – fine for KPMG was £13.5m.
Conviviality – £3 million fine.
Rolls-Royce Group is ongoing.
The collapse of Wiregard will continue to send ripples across the auditing profession.
NMC Health – ongoing.
Stagecoach – for EY was £2.2m
EY is also mentioned along with PwC over Olive Clive & Co
Thomas Cook featured previously
Lookers – ongoing
Autonomy – fines of £15m plus costs, though I have some sympathy with the difficulty of valuing the company that was subsequently sold to HP which then split up its business and Autonomy did not fit well into either of the two demerged firms HP and Hewlett Packard Enterprise.
SIG is ongoing.
Mitie is ongoing
FRC – Other challenger and smaller firms investigations
MacIntyre Hudson LLP – MRG Finance UK plc
Crowe UK LLP – Akazoo Limited
BDO LLP – NMCN plc
Mazars LLP – French Connection Group
Saffery Champness – Greensill Capital (UK) Ltd
Grant Thornton UK LLP – Sports Direct International plc
There is one more book to come on Disruption in Auditing.
Senior KPMG executive faces scrutiny over M&C Saatchi audits. The FRC is making makes inquiries after accounting scandal at the advertising group
FRC delivers initial investigation report into KPMG’s 2013 audit of Carillion but it was not published.
The major event is the publication of the Department for Business, Energy & Industrial Strategy(BEIS) released its suggestions in a government white paper named ‘Restoring trust in audit and corporate governance: proposals on reforms in March 2021. As this is a consultation document, responses to the white paper close on 8 July 2021. How this fits in with the FRC views of corporate reporting is difficult to fathom. This will mean that the new ARGA (replacement to the FRC) with its new enhanced powers is virtually free to dictate any changes.
These proposals can be accessed by this link:
Our comments on this report can be found on this file:
Apart from their 232 page document, there is an Impact Assessment (207 pages) and a summary of 30 pages dealing with:
a) Financial reporting – 82 reactions/suggestions
b) Quality and effectiveness of audit – 66 reactions/suggestions
c) Audit market – 5 reactions/suggestions
Available with this link:
These cover all the suggestions of the Kingman Review, The Competition and Market Authority, and the Brydon Review. These can also be downloaded from the above link. Not all the individual recommendations of the three reports are adopted in the BEIS recommendations. Since this is a consultation, many of these will be argued by both listed companies and auditors. We expect the full set of recommendations to be watered down. The government may be afraid, in a Brexit world, that tougher rules and regulations would deter companies coming to the UK or investing in the UK. Existing companies may wish to leave the UK for listing purposes (despite Unilever’s move to Amsterdam being cancelled).
These proposals include new reporting obligations on both auditors and directors (even those without an accounting association) regarding detecting and preventing fraud, with boards required to set out what controls they have in place and auditors expected to look out for problems. In total the government estimate this would cost business £1.7 billion. We think this may be an underestimate but not by much. Well worth the additional cost spread over the current listed company criteria and about 2,000 additional firms.
In summary this government white paper can be summarised as:
Widening of the scope of the regulations and who is affected by the proposals
All listed companies in the two London stock market and the Alternative Investment Market. Additionally the largest private companies would be included. This would add around 2,000 new entities to the new regulations. Also an acknowledgement that stakeholders are much wider than investors, financiers, and shareholders.
- Enhanced powers for ARGA (previously the FRC)
- ARGA will have many powers over all reporting and audit matters.
- Operational split of audit and consulting divisions of an audit firm. A stand-alone audit profession, independent of the professional accountancy bodies. Increased scrutiny of their work. The old FRC (but still current at time of writing) will push through the separation of audit and non-audit divisions.
- Auditors will take into account a wider set of information including the whole of the narrative part of the annual report. This may include other information including climate and other environmental, social or stakeholder concerns.
- A junior/senior dual audit which will enable the Big Four augmented by a challenger/mid-tier firms as a junior partner in the so called ‘managed shared audit’.
- All directors to be held accountable for adequate internal controls – even those with no accounting qualification (a change from the old FRC). The proposals aim to make directors more accountable if they have been negligent in their duties, with fines or suspensions in the most serious cases of failings, including the lack of internal control to prevent fraud. This once again applies to all directors as does the sections immediately below.
- A set of rules on dividends pay-outs and capital maintenance. Directors may be asked to justify any dividends or buy-back share scheme.
- More details on forward looking statements. To the going-concern and viability statements, are replaced by three new resilience statements dealing with the short-run, medium run and longer run – the later time horizon to be decided by the directors. All such statements to be signed off by all the directors.
- New rules governing non-executive directors (NEDs) and duties to be performed by them. As Sir John Thompson of the FRC said non-executive directors can’t just turn up and cash in. We certainly wanted a more professional approach for these NEDs given that they also have demanding full-time jobs elsewhere.
- The possibility of a claw-back on directors’ remuneration for the largest companies.Directors’ remuneration would contain two-year clawback or malus provisions for serious misconduct, a material misstatement of results or error in performance calculations, failures of internal controls and risk management, reputational damage and unreasonable failure to protect the interests of employees and customers.
- These proposals give investors better tools to exercise stewardship through:
a) An advisory shareholder vote on a company’s audit and assurance policy.
b) A right of shareholders to propose to the audit committee areas of emphasis to be considered within the auditor’s annual audit plan.
There will much discussion and these proposals will be picked over by all the interested parties and no doubt (as we have said) watered down or made more acceptable to the interested parties.
We think that the proposals should have contained more about the publication of forecasts (numerical and financial modelling) with directors believing in their own forecast including non-executive directors building and running a simplified financial model of their entity with several different time dimensions.
Helen Thomas, writing in the FT, ‘Long road to audit reform is littered with questions’. 18 March 2021, made the following criticisms:
- Lack of choice in auditors. “First, it is indeed “not healthy” that 97 per cent of FTSE 350 audits are undertaken by just four audit firms, especially as internal conflicts of interest and auditor rotation mean not every Big Four firm will be bidding for every mandate”. She did not like this senior/junior partnership is a halfway house between s single auditor and the joint audit requirement in France.The Big Four firms will still complain about duplication, logistical complexity, and rising costs.
We agree but the solution is not to have joint audits in our view. See https://fin-rep.org/which-book-updates/disruption-to-the-audit-market-the-future-of-the-big-four/updates-news/
- Second, she believes that the ‘tougher rules holding directors responsible for the accuracy of the numbers may yet end up a tad flimsy. The government’s three options in this area span a broad range of outcomes, from a simple director statement in the annual report to a fully vetted opinion from the auditor as to the effectiveness of the company’s internal controls’. Not quite the equivalent of US’s Sarbanes-Oxley regulations. We hope that this regulation will be strengthened over time.
Professor Karthik Ramannawiring in the FT on 20 March 2021 in article titled ‘UK audit reforms fail to address the real problem behind scandals’ claims that these proposals are inherently weak.
Alas, it has not been worth the wait. The proposals focus almost entirely on fixing “rules”, not rebuilding “norms”. The key idea seems to be that new regulations and regulators will succeed where old ones failed. But the trouble is not badly designed rules; it is that, whatever the rules, we lack a systematic culture in audit firms and corporate boardrooms to challenge chicanery when it presents itself. True, the accounting standards that enabled Carillion to avoid goodwill write-offs and instead pay out dividends are flawed, in that they give managers unverifiable discretion over accounts. We should fix them. But the standards do not impede auditors and independent directors in questioning management’s reporting judgments.
The FRC has made some changes to the principles following our analysis of the firms’ implementation plans:
- To clarify that services provided to non-audited entities should be commissioned by those charged with governance at the entity or be assurance services for third party recipients.
- To increase the minimum proportion of revenue within the ring-fence that must be derived from audit.
- To confirm that the audit practice should not receive fees for introducing business to other parts of the firm and that partners in the audit practice should not be incentivized for sales passed to other parts of the firm.
Company founders could maintain control over their firms after listing them on a London exchange under its proposals.The new rules aim to close “a gap”, which has opened up between the UK and other trading centres post-Brexit and attract more firms to list in London.
Essar’s UK oil business hired auditor with just three accountants.
‘Essar’s hard-pressed UK oil business turned to an audit firm with only three chartered accountants to sign off on its accounts after Deloitte and BDO cut ties with the company. Essar Energy, a subsidiary of Indian conglomerate Essar Group, controls the Stanlow refinery near Liverpool, through Essar Oil UK. The facility supplies about one in six litres of fuel used on British roads and employs 900 people. Essar Oil UK, which is trying to raise funds to stave off crisis after a sharp fall in demand during the pandemic, is facing concerns over its governance and finances. Three directors have resigned in the past month and Lloyds Banking Group stopped acting as its main lender. Essar Energy, which reported revenues of $8.75bn in its latest accounts for the year ending March 2020, hired PBG Associates to sign off on its financial statements last year. The appointment of the small firm based in Hayes, Middlesex comes as the accounting industry faces questions over how to ensure effective audits of large companies that have been snubbed by major audit firms, sometimes over regulatory or reputational concerns’.
GT and Sanjeev Gupta
The administrator of bust finance firm Greensill Capital has been dragged into a storm over conflicts of interest after advising its biggest debtor, steel tycoon Sanjeev Gupta, on a string of deals.
Grant Thornton was appointed to handle the collapse of Greensill and recoup cash for its creditors after Swiss banking giant Credit Suisse froze a $10 billion (£7 billion) fund, tipping Greensill into insolvency. However, the mid-tier accountancy firm can also be revealed to have played a key role in the growth of Gupta’s $20 billion turnover metals empire over several years, advising him on deals in Scotland, Wales and France.
The partner who led KPMG’s audit of Carillion leaves the Big Four firm. Peter Meehan was previously suspended in January 2019.
Ministers and business leaders have raised concerns over the soaring cost of insuring British directors after prices more than doubled in the past year on concerns about corporate governance and pandemic-related claims.
Operational separation of audit practices:
The Financial Reporting Council (FRC) published principles for operational separation of the audit practices of the ‘Big 4’ firms in July 2020. The FRC asked the firms to submit their implementation plans by 23 October 2020. The FRC has reviewed these plans and discussed them with the firms individually and is now content for the firms to move to the next stage of implementation. The firms’ progress will continue to be closely monitored against the milestones in their plans and the FRC will provide feedback and challenge to the firms on their arrangements.
Izzy Englander’s Millennium Management hedge fund had invested $4.4bn in blank-cheque SPAC companies at the end of 2020.
“Buy now, pay later” firms such as Klarna and Clearpay will be closely monitored by the UK’s financial regulator after the use of such services nearly quadrupled during the coronavirus pandemic, raising fears over consumer debt levels.
KPMG UK partners took a 11% pay cut amid Covid slowdown. This follows others have did the same. From an average of £640,000 to £572,0000 for their 582 partners representing a saving of £288 million.
In the US it is claimed that PwC didn’t break any audit quality records in its 2019 PCAOB inspection report, which was released on Tuesday. In fact, PwC’s audit failure rate in the 2019 report (for audits inspected in 2018) got worse.
The Financial Reporting Council (FRC) has given leading audit firms a record £43m in fines for sub-standard audits marking a threefold increase in one year, while individual partners have been hammered with £1.6m in personal fines.
Consulting firm Deloitte’s is in hot water in China after one of its employees reportedly made a 55-page presentation on social media exposing the firm’s alleged accounting violations in China, including neglecting some of its clients’ abnormal financial spending, skipping auditing procedures, and fabricating figures.
The global chairman of PwC has pledged to “aggressively” review how the firm can better hunt for frauds following Wirecard and other accounting scandals.
Ministers and business leaders have raised concerns over the soaring cost of insuring British directors after prices more than doubled in the past year on concerns about corporate governance and pandemic-related claims.
Grant Thornton ‘failed to check Patisserie Valerie cash levels’. GT, it is claimed, failed to check cash levels.
Boohoo (claims of illegally low wages) and the takeover of Asda (Leveraged buy-out – private equity/Issa bothers bought a £7 billion company for less than £800 million) were much in the news.
KPMG resigns as auditor of Triterras, amid accusations that the Singapore-based fintech misled investors over transactions on its blockchain platform Kratos.
An interesting article for small accounting firm – though US may be useful for the UK small accounting firm. See:
The ICAEW released a site to suggest current and future directions for audit:
Financial Reporting/Auditing news in 2020
New FRC investigations and other events (November 2020)
2 November (FRC): launch event to discuss the Future of Corporate Reporting on 11 November.
30 October: Logistics Group Holdings(owned by the billionaire Barclay family), which is behind the Yodel and ArrowXL businesses, has cautioned in its latest set of accounts for 2019 that there is a “material uncertainty” over its status as a going concern. This could be the first of many such similar statements due to the pandemic.
20 October (FRC): a) KPMG and Silentnight; b) Findings into local council audit inspections raised new concerns. C) A senior executive at PwC has been identified in a £63m court case against the Big Four accounting firm in which it is accused of leaking confidential client information.
25 October: The set of banks that steered The Hut Group towards its stock market listing have raised red flags over the company’s governance – a month after sharing £35 million in fees.
21 October (FRC): FRC review reveals where company reporting needs to improve,
20 October (FRC): consultation on the proposed revision of its UK auditing standard ISA (UK) 240 (Updated January 2020) – The Auditor’s responsibilities Relating to Fraud in an Audit of Financial Statements.
19 October (FRC): Amendments to UK and Ireland accounting and reporting standards dealing with IFRS 17, FRS102/105 COVID rent concessions, and FRS104 on going concern.
16 October (FRC): Big Four’s fees for non-audit work for audited entities continue to decline
15 October (FRC): Reporting in times of uncertainty – a look forward
14 October (FRC): Tips on S172 for benefiting all stakeholders and not just shareholders.
8 October (FRC): FRC released a discussion paper proposing a future for corporate reporting based on a principles-based framework. See:
4 October: Restructures on the cards as firms attempt to ring fence audit practices from their consulting arms.
3 October: KPMG is facing a damages claim over an accounting scandal at the insurance services group Quindell.
30 September (FRC): Consultation on changes to the governance codes.
Auditing the ‘most ghoulish companies’ (November 2020).
There are two issues. a) Not only is there limited choice among the Big Four, but there is clear evidence that the Big Four and even the smaller challenger are unwilling to take on some audits, b) Secondly as Oliver Shah from the Sunday Times says:
“…do we really want small firms — possibly smaller than BDO or Mazars — taking on complex companies run by difficult founders, and sometimes becoming dependent on them?”
Reluctant audit firms (November 2020)
Deloitte, KPMG and BDO have declined to become the auditor for Lex Greensilll ahead of a possible float, the Financial Times said last week — despite a rumoured multi-million-a-year fee. Lex Greensill, is a leading financer of working capital finance and other supply chain finance. As such the company has lent substantial funds to the less than transparent Liberty House and Liberty Steel Group chaired and run by Sanjeev Gupta. As the Sunday Times succinctly put it:
“…the Australian financier with a ghoulish proclivity for helping the steel tycoon Sanjeev Gupta spin his financial spiders’ webs. Greensill’s eponymous supply-chain finance firm may count David Cameron as an adviser and Japanese giant SoftBank as its backer, but its reputation has scared off big accountants Deloitte and KPMG, as well as the challenger BDO.”
There is some background to this which includes some suspicion about the Gupta empire. GFG Alliance is the umbrella group that includes Liberty House/Steel, Alvance Aluminium and SIMEC renewable energy. The story goes:
“Greensill played a central role in the 2018 scandal in which Swiss asset manager GAM was forced to close a fund stuffed with illiquid bonds issued by Gupta’s companies. Greensill had arranged the securities, which were bought by star GAM fund manager Tim Haywood, who was later sacked for gross misconduct, including due diligence failings. Last year, Bloomberg said German regulator BaFin was broadly scrutinising Greensill over its exposure to Gupta’s family empire, GFG Alliance.”
So the cross-selling of consultancy into audit clients has gone. The worst case that has come to light involved BHS where PwC carried out eight times more advisory than audit work for Sir Philip Green’s BHS in 2014.
Other companies to have difficulty finding an audit firm include Boohoo, which has suffered the departure of PwC and deemed by this Big Four firm as too risky to audit. Mike Ashley’s Sports Direct was ‘momentarily a member of this club until it managed to get RSM to replace Grant Thornton(GT), which had been unimpressed with the discovery of a potential €674m tax liability on the eve of its results last year’.
The new majority owners of Asda, the EG Group (owned by Issa brothers) has run into problems with their auditors, Deloitte, resigned due to governance issues. I suspect we will see more of such resignations as the pandemic stretches profitability and funding.
Rising audit fees (November 2020)
Although audit fees are rising rapidly, auditing is still not so profitable as consultancy. There is also the reputational risk and the heavier fines now imposed by the FRC on audit firms. So expect more problematic companies to have difficulty finding an audit partner especially as the pandemic has made the future uncertain. Though a large fee from a new client is ‘irrelevant if you’re at risk of being fined many multiples of that by the FRC when it goes wrong.’
In terms of audit fees just one possible outlier is PZ Cussons annual report for May 2020 showed an exceptional audit fee of £2 million up from an historical low figure of £0.5million (audit Deloitte). Is this just a pandemic abnormality or an increase which will become more normal with the new operational split of audit from consultancy and both divisions having to be stand on their own and be profitable? With PZ Cussons there may well have been good reasons for this increase. Or will this herald a new era of rapidly rising fees. May be a bit of both?
Can the smaller challenger firms cope? (November 2020)
The second issue is less clear cut though Oliver Shah thinks the answer is ‘No’. It is true that the smaller firms have had their fair share of auditing scandals. There is also the view that the challenger firms are unable to gear up on new technology and audit systems to cope with the larger audits. For example, Engine B is a new complex artificial intelligence (AI) system which will aid audits to spot fraud and to prevent further scandals. AI requires a level of sophistication and staffing which may be beyond the reach of the challenger firms who are not only in computation for IT personnel with the Big Four but also the big tech companies.
Oliver Shah also questions whether the smaller challenger firms (still quite large) want to maximise growth. Shah thinks that many of the smaller ones are lifestyle maximisers: the partners want to earn enough to pay the mortgage and their children’s school fees; they might not be particularly interested in ambitious expansion.”
This is reinforced by Grant Thornton (GT) deciding to end a long-running legal battle over its failure to expose a fraud at a former client, AssetCo, leaving it facing a bill of £28.6m. The FRC report into local council audits found two challenger firms, GT and Mazars, where the level of audit quality requires significant improvement.
ICAEW audit monitoring report finds a quarter of audits are substandard (October 2020)
The ICAEW which supervises more than 12,000 firms found that 18 percent of audits required improvement and 8 percent needed significant improvement. The annual inspection reviewed 960 audits from a wide range of businesses last year. It does not review audits of public interest entities, broadly defined as listed and large private companies, which are monitored by the FRC.
Audits typically needed to improve because they lacked sufficient evidence, reached inappropriate decisions in key areas, failed to challenge management, or lacked adequate documentation. Areas of particular concern included the audit of property valuations (little or no evidence).
Deloitte first with plans for break-up (October 2020)
Deloitte has become the first of the Big Four accountancy firms to devise plans for a new governance structure to comply with its regulator’s demands for a break-up of their operations.
The firm will establish an audit governance board in January that will provide independent oversight of the UK audit practice. The board will ensure that the firm complies with a plan by the Financial Reporting Council for the operational separation of the audit divisions in Deloitte, KPMG, PWC, and EY.
The Big Four have until the end of next month to tell the regulator how they plan to implement proposals announced in July. The regulator wants firms to pay auditors in line with profits of the audit division. It has told them to sever the financial links between auditors and other parts of their business. The firms will have to complete the separation by the end of June 2024.
FRC says companies must improve COVID-19 reporting (October 2020)
UK companies should have disclosed more information to their investors about the impact of the pandemic. The FRC has found, in its first review of corporate reporting since the onset of the pandemic. In a study of financial statements covering periods to the end of March — across eight sectors including retail, real estate, and aviation — the FRC judged that most contained “sufficient” information on the effect of Covid-19 on performance. But some, especially half-year results, needed “more extensive disclosure” to help shareholders understand how the virus had changed the outlook for months and years ahead.
FRC Audit Inspections (October 2020)
In July 2020, the FRC ‘lambasted’ the UK’s largest accounting firms. The FRC’s Executive Director of Supervision, David Rule said:
“We are concerned that firms are still not consistently achieving the necessary level of audit quality. While firms have made some improvements and we have observed instances of good practice, it is clear that further progress is required. The tone from the top at the firms needs to support a culture of challenge and to back auditors making tough decisions.”
Basically, the FRC has criticised the UK’s biggest accounting firms for the ‘unacceptable’ quality of their audits after their review found one in three was substandard. The Financial Reporting Council’s annual inspection of the seven biggest firms — KPMG, EY, PWC, Deloitte, Grant Thornton, BDO, and Mazars — reviewed 88 audits, including those for 45 FTSE 350 companies. It found that 29 of the 88 audits reviewed required more than limited improvements, while seven of these required significant improvements. Of the FTSE 350 audits, 13 were found wanting, with two requiring significant improvements.
Select Committee urges more urgency on audit reform (October 2020)
Darren Jones, chairman of the Commons business select committee, said the business department needed to show “far more urgency” after it declined to give a date for primary legislation on audit reform.
The legislation is required to turn the Financial Reporting Council (FRC) into a new body able to impose greater sanctions in cases of corporate failure. The long-trailed Audit, Reporting, and Governance Authority will also have new powers to direct changes to accounts, require prompt explanations from companies, and in the most serious cases publish a report about the company’s conduct and management.
Wirecard (October 2020)
More and more information is coming to light. It seems that everyone warned everyone. There was a failure of the auditors, of the regulators, and of the German government. Everyone bought into the Wirecard success story which, as it happens, was built on sand.
It turns out that McKinsey warned Wirecardman agent one year earlier to take immediate action on internal controls. But then management failed to act and then passed the consultancy project over to PwC. Nice, if you do not like the conclusions of your consultants, just hire another consultancy firm. Of Course, EY also warned that Wirecard that the KPMG special audit, delivered a few month before the collapse, risked misinterpretation and needed more information on payments group’s third-party business. Olaf Scholz, Germany’s finance minister, defended his handling of the Wirecardscandal insisting the authorities had done all in their power to uncover irregularities at the company. Something that is patently untrue. German politics was solidly behind Wirecard. There were also plans for Wirecard to takeover Deutsche Bank. Though it now appears that there have been whistleblowers from as far back as 2016.
The picture that emerges of the Wirecard businesses that did exist is a stark contrast to the one painted by former chief executive Markus Braun, who hailed the group as a highly profitable pioneer in the payments industry. It reveals the scale on which the company, Germany’s biggest corporate fraud in decades, also misled investors about its real businesses. In fact, the non-Asian business racked up huge pr-=tax losses.
The problem left local business and people scrambling as they were locked out of their payment processing systems. Cafés, restaurants, hotels, and mobile network providers were left with no payment processing systems after the Monetary Authority of Singapore, the de facto central bank, ordered Wirecard to cease payment services in Singapore.
Some good may come of this as PwC pledges to review fraud detection after Wirecard scandal shakes their industry. But shouldn’t they have done that anyway?
However, EY faces mounting backlash after Wirecard whistleblower revelation: one of the accountancy firm’s own employee’s flagged potential fraud at Wirecard four years before the company collapsed. Even they missed their own investigation in March 2017 (Project Ring).
Audit/Reporting Breaking news July 2020
FRC one again finds quality of all top audit firms unacceptable
The FRC’s Audit Quality Review team reviewed 88 audits across these firms and concluded that only two thirds of the audits were of a good standard or required limited improvement. The individual reports for each firm (as well as the mid-tier and smaller firms) can be found on the FRC site.
Tabby Kinder of the FT points out that its sharpest criticism was reserved for PwC, the UK’s largest audit firm by revenue, as well as KPMG and Grant Thornton. These are the firms have come under fire for their involvement in high-profile corporate failures at Thomas Cook, Carillion, Patisserie Valerie, and earlier BHS. The FRC focused their activities on the following issues: going concern and the viability statement, the other information in the annual report, long-term contracts, the impairment of assets and fraud risk assessment.
The Times referred to these results as damning:
The damning results come amid pressure on the government to bring forward reforms of audit firms and regulation after a string of corporate collapses including Carillion, BHS and Thomas Cook. The delay has raised concerns at a time when Covid-19 has accelerated the risk of corporate failure.
FRC dictates operational split of Big Four
6 July 2020 the FRC announced its principles for operational separation of the audit practices of the Big Four firms. A first in the world. The objectives of operational separation are to ensure that audit practices are focused above all on delivery of high-quality audits – in theory anyway.
Interesting that the existing FRC is initiating this split rather than the new replacement ARGA. This am mean that the enhanced FRC will continue – perhaps. The timetable is:
- An implementation plan should be submitted to FRC by 23 October 2020.
- The transition timetable should be to complete implementation by 30 June 2024 at the latest.
The FRC 22 point planlays out the details of the operational split of the Big Four (PwC, Deloitte, KPMG, and EY) audit/accounting firms – though their consulting divisions far exceed their audit counterparts (being only around one fifth of the total). There have been a series of reviews (CMA, Kingman and Brydon) since the collapse of Carillion in 2018 which has led the severe criticism of the Big Four.
The FRC’s plan seeks to ensure the Big Four pay auditors in line with the profits of their audits, ringfencing the finances of the audit division with a separate profit and loss account, and introduce an independent audit board to oversee the practice.
This will significantly increase the cost of audits as there can be no cross-subsidy from the more lucrative consulting divisions.
The FRC stopped short of a full break-up of the firms such as the spinning off audit teams into independent legal entities, that had been mooted by some politicians in the wake of the collapse of Carillion. Since then there have been further high-profile corporate collapses, such as Thomas Cook, Patisserie Valerie, NMC Health, LCF, Kaloti (Dubai) and, most recently, German payments processor Wirecard. The challenger mid-tier firm Grant Thornton was the auditor for Patisserie Valerie and another failure Conviviality,
We fell that this however does not provide a sufficient number of auditors to provide choice –
See our book Bhaskar K., and Flower J., with Sellers R., Disruption in the Audit Market: The Future of the Big Four. Routledge, 2019. In this volume, we simulated the audit markets under a variety of different splits of the audit firms and tested for independence and quality. Our conclusions were that such an operational split is insufficient to improve audit quality.
Also such an operational split still maintains the inherent conflict of interest in audit market structure where auditors are paid by the very groups that hire them.
Tabby Kinder in the FT noted that:
But some commentators said the measures did not go far enough. “It is a semi-split that is unlikely to be the last reform that will be needed,” said Erik Gordon, professor at the University of Michigan.
Others criticised the four-year “lag” for implementing the changes. “If this is held out as the solution to audit quality then we’re all kidding ourselves,” said one senior industry executive.
An individual at a Big Four firm pointed to the logistical challenges, calling the requirement for separate audit balance sheets a “nightmare” as it would require the firms to “untangle” central administrative costs.
Revisions to Going Concern, Risk and Viability statements (COVID-19)
15 June 2020 FRC
During the 2007-2009 crisis, we were told by a number of interviewees that a cross-sector wave of warnings didnot happen, This is confirmed by Tabby Kinder in the FT. The FRC obviously heeded her warnings that auditors have a backlog of annual reports that are likely to question the ability of companies in the hardest hit sectors during the pandemic to continue trading as a going concern for the next 12 months. Tabby Kinder writes:
A flood of going concern warnings or qualified audit opinions — in which an auditor says there are misstatements or that they could not obtain enough evidence to sign off the accounts with a clean bill of health — could spook markets. There is also expected to be a rise in “emphasis of matter” audit reports, which highlight serious uncertainties around matters such as property or inventory valuations.
Tabby goes on to report:
The head of audit at one large firm said some major businesses had approached the government’s department for business in recent weeks to complain that their auditors were putting too much pressure on them. “They have complained that we’re being overly prudent,” the auditor said, adding: “However, it’s clear that none of the stress tests we forced companies to do back in February and March look so crazy now.”
He said his firm was forcing all consumer-facing companies it audits to stress-test being closed until September and a phased recovery for a further 12 months. He said that travel and leisure companies had been told to “assume no European summer revenues and no winter sun revenues at all”.
So firms believe the auditors are putting too much pressure on them in what is often regarded as a pass or fail type test (going or not going concern). The FRC has clarified that there are ways in which the survival of a company can be graded with different possibilities.
The FRC responded with two reports: Covid 19 – going concern, risk and viability and Covid 19 – resources, action, the future
The reports consider that investors are fully aware that the levels of uncertainty are unprecedented and, to a large extent, outside companies’ control. The FRC encourage Boards of companies to consider plausible scenarios and report on how they intend to respond to these going forward. Examples of good practice reporting were included to assist companies.
Specific elements of uncertainty relevant to the next 12 months might include (but are not limited to): a) Timing of resumption of operations. b) Further restrictions that limit the return to normal operations. c) Restrictions placed on government (or other) capital. d) Timing and continuation of government schemes and support packages. e) The outcome of capital raising actions, discussions with banks, and landlords. f) Short-term impacts of pricing changes to revenue and expenses. g) Impacts on human capital, the supply chain and customers.
The FRC summaries of the these issues are provided below:
Locating and obtaining short-term cash resources is often about building resilience and flexibility but, for some, it is ultimately about survival. In such circumstances,reporting on going concern and uncertainties becomes more important. The disruption to business models in the short-term might mean that the going concern assessment is more complex task. However, going concern is not a simple binary or pass/fail concept. A company can be a going concern even when one or more material uncertainties exist. In such circumstances what becomes important is the disclosure about the uncertainties and management’s consideration of these.
Reporting by companies on principal risks provides investors with key information about the resilience and adaptability of a company’s business model and strategy to internal and external shocks. COVID-19 has created risks for many companies and caused a reconsideration of risk profile and appetite. Investors therefore want to understand how those risks have changed and how they specifically affected companies, and how management have responded.
The viability statement was introduced following the 2008 financial crisis to provide investors with a better view on the longer term prospects and viability of a company’s future. The current crisis is a test of the value of viability statements. A viability statement with realistic scenarios and clear assumptions provides boards an opportunity to communicate their longer-term prospects, even when the short-term outcome is less certain.
Financial Failures Breaking news July 2020
The jury is out as to exactly what happened with Wirecard. The company offers its customers electronic payment transaction services and risk management, as well as the issuing and processing of physical cards. From 2006, Wirecard moved into banking. It was licensed by Visa and Mastercard, meaning it can both issue credit cards and handle money on behalf of merchants. This unusual hybrid of banking and non-banking operations makes its accounts harder to compare with peers, and helps persuade investors to rely on the company’s adjusted versions of financial statements.
Wirecard: History of earlier warnings
The full history can be seen in the FT article on Wirecard’s timeline. Wirecard became one the 30 companies in the DAX.
2008: The head of a German shareholder association publishes an attack on Wirecard, suggesting balance sheet irregularities. EY is appointed to conduct a special audit, and the following year replaces the small Munich firm that had previously acted as group auditor. The German authorities eventually prosecute two men in connection with the attack, who had not disclosed positions in Wirecard stock.
2010-2014: Rapid expansion in Asia. Investors are drawn to Wirecard’s rapid growth and claims of superior payments technology.
2015: FT raising questions about inconsistencies in the group’s accounts and a €250m hole in the group’s balance sheet. Wirecard made its largest-ever takeover, of Indian payments businesses in a €340m deal. J Capital Research reports that Wirecard’s operations dotted across Asia are far smaller than it claims.
2016: Short-sellers and the FT start a campaign. Allegations of money laundering were denied by Wirecard and BaFin (Our equivalent of the FCA). Wirecard announces it is buying a prepaid payment card business from Citigroup, entering the US market.
2017: AEY clean audit and better reported cash generation leads to renewed investor enthusiasm. Bought Citigroup’s Asian payment processing operations.
2018: Wirecard’s Singapore HG triggers an investigation into members of their team following a whistle-blower’s allegations. By August Wirecard is valued at €24bn and claims it has 5,000 employees, who process payments for about 250,000 merchants, issue credit and prepaid cards and provide technology for contactless smartphone payments. Whistle-blowers contact FT.
2019: The Singapore police raid Wirecard’s offices. BaFin announces a two-month ban on short selling, citing Wirecard’s importance for the economy. The FT reports that half of Wirecard’s business is actually outsourced, with the payments processing handled by partners who pay Wirecard a commission. FT find further detrimental material and Wirecard threatens to use the FT. Wirecard raises nearly €1bn. FT finds most of the profits are generated by three partner companies in Philippines, Singapore and Dubai. EY approves accounts. FT continues its campaign and Wirecard responds saying ‘nothing to see here’.
Late 2019: Wirecard raises new bonds. Wirecard uses FT. The FT publishes documents indicating that profits at Wirecard units in Dubai and Dublin were fraudulently inflated, and that customers listed in documents provided to EY did not exist. Under pressure from investors Wirecard appoints KPMG to conduct a special audit, which it says will clear it of wrongdoing – but in fact in 2020 KPMG reports negatively. FT finds other issues.
2020: KPMG report delayed then published. it can not verify that arrangements responsible for “the lion’s share” of Wirecard profits reported from 2016 to 2018 were genuine, citing “obstacles” to its work. Then Markus Braun (CEO) reports to investors that EY have no problem at all to sign off the audit 2019. But publication of results is postponed to June. Any wrongdoing is denied.
2020 June 16 onwards: The Philippine banks BPI and BDO inform EY that documents supposedly detailing €1.9bn in balances are missing, CEO resigns. He and other are arrested. Wirecard acknowledges for the first time the potential scale of a multiyear accounting fraud. 25 June Wirecard files for insolvency. Markus Braun bailed but under possible criminal charges. The CFO, head of Paycard Payments Unit in Dubai and others were arrested.
One issue that cropped up during these arrests was that of Jan Marsalek, the COO, who has now disappeared although there is an international arrest warrant out for him. As the FT reported he has led multiple lives, with complicated and overlapping commercial and political interests. Sometimes those interests cleaved to Wirecard’s aggressive expansion plans in frontier markets. Sometimes they coincided with his own sprawling and unusual range of personal investments. And sometimes they seemed to fit neatly with the work of Russia’s intelligence agencies. He was known to be recruiting 15,000 Libyan militiamen.
Wirecard: Profitability in doubt?
These are the accusations. Money laundering. Profits made from a few customers. Most of the business loss making in Europe. Many customers being pornographic or gambling sites. In addition, it now it transpires there are possibly all sorts of other errors. Financial planning undertaken on large spreadsheets with errors (duplicate clients and wrong currency conversion are rumoured) and the bulk of the business coming from clandestine pornographic sites: with the bulk of the business coming from a handful of large clients.
Wirecard: failure of the auditors (EY)
The FT reported thatEY failed for more than three years to request crucial account information from Singapore;sOCBC bank where Wirecard claimed it had up to €1bn in cash. This is normally a routine audit procedure that could have uncovered the fraud. The FT also reported that the auditor between 2016 and 2018 did not check directly with the OCBC Bank to confirm that the lender held large amounts of cash on behalf of Wirecard. The FT claimed that instead, EY relied on documents and screenshots provided by a third-party trustee and Wirecard itself. The FT quoted:
“The big question for me is what on earth did EY do when they signed off the accounts?” said a senior banker at a lender with credit exposure to Wirecard. A senior auditor at another firm said that obtaining independent confirmation of bank balances was “equivalent to day-one training at audit school”.
The head of audit at a rival accounting firm to EY said: “It is beyond the realms of reality that EY wouldn’t have had [the bank balance confirmations] unless they did a very poor audit. Cash is easy to audit. If investors can’t trust the cash number, what can they trust?”
Hansrudi Lenz, professor of accounting at Würzburg University, told the Financial Times that it was “not sufficient” for an auditor to rely on account confirmations that were provided by third parties. “The auditor needs to have full control over the delivery of account confirmation,” he said, adding that this was stipulated by procedural guidelines.
Wirecard: Failure of the regulators
Germany in the aftermath of the Wirecard scandal is doubling down and rewarding the regulator that seemed to turn a blind eye. This seems to be a backwards step rewarding the authority that failed to notice any warning signs despite numerous indications. At least in the UK, when something has gone wrong it is noticed and mostly investigated and revealed. This looks to me as if the errors are being swept under the carpet.
BaFin is the financial supervisory authority in Germany equivalent to our FCA. The other two bodies are the Financial Reporting Enforcement Panel [FREP] and the German Audit Oversight Body (Abschlussprüferaufsichtsstelle [APAS]). These two bodies cover the enhanced role of our FRC.
BaFin that banned investors from short-selling against Wirecard shares for two months. This was the first such restriction on an individual company in German stock market history. And as the press reports that was quickly followed by a criminal complaint against two FT journalists who had reported the whistleblower allegations about the payments company.
The head of the equivalent of our FCA (BaFin) now claims that it was not his agency’s job as Wirecard was classified as a technology company rather than a financial services provider. Pretty weak as the same agency bent over backwards to help Wirecard previously. Even if now it appears the company was engaged in money laundering activities. Yet BaFin backed Wirecard previously in an unpresented move to defend Wirecard`.
The Economist’s view
Apart from extolling the virtues of short-sellers, who started the rumours back in 2008, their view is:
Wirecard’s rise and fall is a case study in the carnage possible when a firm’s accounting goes awry but national regulators and big investors are so seduced by the company’s narrative that they cannot, or will not, see it. It is also a reminder of how markets stand to benefit from short-sellers—who try to make money betting against listed firms, by selling borrowed shares and buying them back later at a lower price. Had the warnings from Cassandras who detected a bad smell around Wirecard years ago been heeded, billions of dollars of losses, many of them borne by pension-fund investors, could have been avoided.
Big banks and investors, including Deutsche Bank and its DWS fund-management arm, backed Wirecard and kept the faith, in some cases doubling down, even as more and more red flags popped up. Many did scant due diligence, instead relying on puff pieces churned out by sell-side analysts right to the end: half a dozen still had buy recommendations on the stock when Mr Braun resigned. Wirecard’s auditor, EY, faces scrutiny, too. German media, for the most part, swallowed Wirecard’s line that it was the victim of a nefarious plot by Anglo-Saxon marauders.
When so many supposedly clever people can get it wrong, anything that injects scepticism is welcome. Such counterweights to market consensus are especially helpful when politicians and central banks are boosterish on asset prices, as they are now, and in countries with a corporatist mindset. Even as Germany has embraced shareholder capitalism, the view that company managers are more trustworthy than their shareholders, especially less patient ones, has proved stubbornly persistent.
FinTech, City, Schadenfreude, Brexit and Wirecard
As Simon Duke in The Times (on Tuesday 30 June 2020) said Schadenfreude (originally German), joliemaligne (in French) represent the happiness we feel when someone else fails. Wirecard failed and perhaps there could have been some of that feeling in the City. How the German financial institutions fell after solidly sticking behind Wirecard.
That is not all. The Times (James Hurley again) claimed that the FCA was given details of an operation whereby allegedly bogus ecommerce sites were used as a front for channelling online gambling proceeds through the international payments system. Fintech – will they benefit from Wirecard’s fall? The big surprise is that there are over 100 newish FinTech companies. Everyone must have seen the Starling’s bank’s advert of a helicopter garden shed. However, there are many more and the number is still rising. See this link for a list. They can’t all survive and prosper surely?
The next problem for financial services is that current Brexit negotiations are not going well and time has run out. Equivalence of rules and the European Court of Justice are sticking points which may mean the City loses its financial supremacy. In my opinion that is Europe’s loss as the winner will be New York, Singapore, and Shanghai.
That however is not the point as Donald Brydon (as in his audit review) has said: “[Audit] firms should have the obligation to find fraud rather than stumble over it”. As reported by the notable Tabby Kinder:
The final conclusion? Nothing may happen. If anything it will probably come down to the regulatory authorities in Germany not being powerful enough or sufficiently sceptical of management. And that includes the auditors. The same criticism has been levelled against the FRC and FCA over previous failures of which Carillion probably caused the most criticism. These failures can never be fully eliminated but I believe they can be reduced. One again, the reliance investors can place in the audit process as being the final check on management is thrown into doubt – regardless of how sophisticated fraud. And Wirecard does not seem to be that sophisticated. Everyone just believed their public statements and news releases.
Breaking news June 2020
The Big Four audit firms earn their keep June 2020
Both KPMG and EY are to be congratulated on going against the market and corporate opinion in giving negatives reviews on probably what was the jewel of the Germany stock market. Frequently the Big Four may have passed private communications about their concerns in non-public correspondence with hope that explanations and/or action would be undertaken to rectify the situation. Whatever happened in private, the impact of these opinions sent the value of Wirecard into a nosedive and may threaten the survival of the company (and perhaps a share of their fees).
The Big Four and the Challenger Accounting/Audit firms June 2020
According to the Financial Times (FT), the BDO is doing well and is the fifth largest accounting firm by revenues, and now audits more listed companies than EY, Deloitte or KPMG – with 15 clients in the FTSE250. KPMG’s descent into third place after the other Big Four from it first place in 2018 has been expected – given its troubles over numerous audits including Carillion. Though the Big Four have tied up the audits of the FTSE100. Grant Thornton (GT) ran into issues and is in the process of retrenching. Growing pains.
Wirecard Accounting saga June 2020
Wirecard finally admitted its errors. It was 1st February 2019, when the FT and then Bloomberg first reported the story of a decline in share value amidst allegations of accounting irregularities in Singapore and other countries in Asia and the Far East. Wirecard’s management has consistently denied any accounting wrongdoing or lack of internal controls. In May 2020, the results of a company-commissioned special audit by KPMG were released. KPMG found that they could not verify the lion’s share of Wirecard’s operating profits between 2016 and 2018 were genuine.
Until now Wirecard has categorically denied any impropriety and have consistently claimed that the conclusions drawn by the FT about the files were incorrect. The auditors (EY) came up trumps and warned that they had found evidence that related parties of the Wirecard bank had attempted to deceive the auditor and had provided spurious bank balances – and refused to sign off the annual results in June 2020. On the 16th June, they postpone issuing their annual accounts. On the 18th Wirecard admitted that €1.9bn of cash was missing. The next day Wirecard’s chief executive Markus Braun has resigned. It is alleged that the two Asian banks where some funds were supposed to have been transferred claim they never received the money. Now a criminal investigation is being launched in Germany and Markus Braun has been arrested.
Shares crashed from a high of €192 at its they day. Wirecard was a German financial technology group. The company joined the exclusive DAX 30 stock market index in 2018 on a wave of investor interest which valued it at €24bn, more than Deutsche Bank, and earned it a place in pension funds around the world. A meritorious and important rise for Germany (post SAP the software company’s much earlier rise).
Shares fell as low as Euros 12 towards the end of June 2020 valuing the company at less than €5bn. The FT reported that missing cash was equivalent to all the profits the group had declared since2012. This puts Wirecard at the mercy of potential recalls of loans.So Wirecard’s future is now in doubt. The company had a m monumental and glittering rise but the accounting and financial controls failed to keep up with its meritorious rise (shades of Patisserie Valerie?).
Knock-on effects may be to hit British financial tech companies using Wirecard’s services such as Revolut and Monzo. British users of Wirecard’s services may have to move their payments business elsewhere.
Reporting landscape: Other Cases in June 2020
Barclays Bank is in the news again. Although the SFO gave up on the prosecution of Barclays over the finance and other deals with Qatar back in 2008, Amanda Staveley’s PCP Capital Partners has launched a high-profile civil trial for £1.5bn.
Other companies in trouble or trying to raise emergency funding include Ted Baker, Warehouse, Oasis, Monsoon, Quiz, Go Outdoors and others. Many might be disposed of in pre-pack administration. Boohoo has done well in the pandemic (rapid response, youth appeal, new athleisure-wear and celebrity input?) came under fire for the value of its shares in Pretty Little Things and to resolve the issue bought the entire company and also went on to buy Oasis and Warehouse. Boohoo is now worth more than combined market capitalisations of Marks & Spencer and Asos.
Contraction and closures continue on the aftermath of the pandemic. This includes the Restaurant Group (including the chain Frankie & Benny’s), Carluccio’s, Pizza Express, and other. Cath Kidston closed in May.
Simec Atlantic Energy half owned by steel tycoon Sanjev Gupta is looking for Chinese partners.
Tesco is in the news again, this time trying to resist pressure to axe a £1.6 million bonus for its departing boss (Dave Lewis) as shareholders prepare to inflict a humiliating defeat on the supermarket.
The founders of a failed peer-to-peer lending platform, Lendy, have had their assets frozen after administrators alleged that they had channelled £6.8 million to offshore companies for their own benefit.
The London Capital & Finance(LCF)scandal has put two companies connected with the failed mini-bond business into administration. These were London Power & Technology and LPE Enterprises. Both businesses were part of a complicated web of companies linked to London Capital & Finance. (This company was accused as one of the biggest scandals to have hit investors in recent times).
Metro Bank among other banks may experience a large rise in bad debts.
SIG roofing specialist was rescued by a US private equity company (Clayton, Dubilier & Rice).
FRC June 2020
The FRC closed its case on Tesco (£250m overstatement of profit in 2014) without any report or penalties. The FRC, however, launched an enquiry into PwC and KPMG in the audits of Eddie Stobart.
FRC is also expected to investigate into the audits carried out by PWC, EY, and by Oliver Clive & Co (a small, London-based firm). All separately signed off on LCF’s accounts without raising concerns.
Sanctions (but no fine) were imposed on KPMG for the audit of Foresight 4 VCT plc in relation to shortcomings in its audits of figures relating to the company’s distributable reserves.
Private equity June 2020
Handful of mainly US groups on spending spree despite worldwide lockdowns to halt coronavirus. For example KKR snapped up cosmetics firm Coty. In fact it has been reported that the top 10 ranking private equity groups by deal count have announced deals worth more than $40bn since the beginning of March 2020.
The dash to raise equity June 2020
According to the FT and others publications, new equity has risen to more than 33% of share capital and discounts have widened. At the moment it seems that large companies have access to liquidity and secured waivers to debt covenants. That said the FT commented that: “a solvency crisis looms once groups drawdown on overdrafts and jack up their balance sheets with borrowings they can’t pay off”.
Breaking news May 2020
1) Coronavirus actions and events
a) Accounting and audit industry suffering shortage of fee income. Resilience? No question. Big Four cutting staff costs by up to 25%. Smaller to mid-size furloughing staff less certain. Bound to be some restructuring (downwards) and mergers/takeovers
among smaller firms.
b) Delays in publishing annual reports (FCA)
c) Tightening of going concern in a period of unprecedented uncertainty (FRC)
d) Delays audit rotation due to coronavirus disruption (FRC)
e) Delays in audit reform (no room for legislation)
but beefed-up FRC more aggressive
f) Dividends pay-outs and share buy-backs may be reduced temporarily
g) Short-selling ban may be extended in some European countries but not to the UK at the moment. Pity.
2) Audit reform actions
a) ARGA to go ahead eventually or
the FRC to takeover enhanced abilities of ARGA
b) Operational split of audit and consulting by the large audit firms to go ahead – eventually (may be through legislation)
c) Consultancy work for audit clients to be banned and extended to large private firms.
d) Audit partners pay to be monitored and may be regulated
e) Resilience of audit divisions to be enhanced through higher audit fees.
f) Joint audits are probably out but not yet dead.
g) Challenger firms are growing (slowly).
3) Financial scandals
a) NMC Health into administration. Under-stated debt massively.
b) Luckin Coffee (China but listed in NASDAQ) overstated sales
by hundreds of millions of dollars of fake sales.
For updates and analyses of the latest on the audit market, go to this website page:
Financial failures and scandals (latest April 2020)
Financial scandals continue on a daily basis. For one reason or another, Company names in the oppress include Woodford, Burford, Saatchi, Sports Direct/Frasers, NMC Health, Credit Suisse, and many others. Of course collapses by retail chains, care-home groups and others continues apace. More than 60 cases since summer 2019.
For updates and analyses of the latest cases go to this website page: