Watchdog probes way fashion firm accounts audited

DELOITTE CO-OPERATING WITH INQUIRY INTO WORK FOR JOULES

THE Financial Reporting Council (FRC) says it is investigating the way in which Deloitte handled the audit of the Joules fashion chain accounts in the year to the end of May 2021.

The FRC said it was looking into the way the accounts that year were put together.

It said it had made the decision to investigate during a meeting of its conduct committee on March 20.

The FRC regulates auditors, accountants and actuaries, and sets the UK’s corporate governance and stewardship codes in order to promote “transparency and integrity in business”.

In a short statement on its website, it said the investigation did not relate to anyone other than the auditor. It said: “The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.”

A spokeswoman for Deloitte said: “We will co-operate fully with the Financial Reporting Council’s investigation and remain committed to the highest standards of audit quality.”

Joules, the Market Harboroughbased country fashion and homeware brand, went into administration in November 2022 following months of financial difficulties.

At the time, it had been in talks with potential backers to save the business, looking for equity investment as well short-term funding, following disappointing sales.

Within weeks, it was announced that Next had formed a partnership with Joules founder Tom Joule to buy the business out of administration for £34 million.

Joules has continued to operate throughout.

In the 2020-21 accounts, Joules reported that strong digital growth had helped it return to profit despite its high street stores struggling during months of Covid lockdowns.

The business said sales were up 4.4 per cent for that year, to £199 million, with revenues also helped by the acquisition of Garden Trading.