Board is out of tune
The saga of Sanctuary Group's long term run-in with auditors Baker Tilly looks set to end out some time next week, though it remains unclear who will walk away happy from the proceedings
Sanctuary, the managers of rock and pop acts like Beyoncé and Status Quo,
decided to sack Baker Tilley after the firm said the company’s accounts failed
to represent a true and fair view, a stance it was duty bound to take once it
concluded that the 2005 figures had understated losses by some £15.9m.
The sacking seemed a bit harsh, given that it was done for offering an honest
opinion. But, of course, Sanctuary felt hard done by because another firm had
offered a clean bill of health.
Offloading an auditor in such circumstances raises some interesting
questions. Surely the point of an auditor’s role is to raise these issues and if
the executives don’t like it they really should just wear it and sort out the
figures.
Sacking an auditor for not liking their news is the sort of thing that
shouldn’t happen. Auditors are there to address the unpleasant, there should be
no expectation that they’re only there to lend a helping hand.
An AGM will decide next week if the new auditors will be KPMG. Analysts have
speculated that investors might vote down the appointment. It’s now in their
hands to send a strong message to the board.
Gavin Hinks is editor of Accountancy Age
