Deloitte hit by probe over botched audit of collapsed fashion firm Joules

Regulators are investigating Deloitte over its audit of retailer Joules, which collapsed last year. 

The Financial Reporting Council (FRC) has launched a probe into an audit of financial statements of the High Street chain for the year to May 30, 2021. 

The Big Four accountancy firm could face a significant fine from the regulator if it is found to have failed to meet standards.

 London-based Deloitte said it would ‘co-operate fully’ with the investigation. 

The firm added that it was ‘committed to the highest standards of audit quality’. Joules was rescued out of administration when retail giant Next bought the majority of the company’s assets for £34million in December. 

The beleaguered retailer, known for selling colourful wellington boots and floral dresses, has struggled with rising costs and waning customer demand. 

Deloitte is the latest firm to be probed by the FRC over an audit of a firm that has collapsed, with a slew of active investigations including into EY’s audit of online sofa-seller Made and PwC’s audit of shopping centre giant Intu. 

Deloitte is also being investigated for its audits of GoAhead Group, which owns the GTR franchise that operates Thameslink, Southern, Great Northern and Gatwick Express trains, and car dealership Lookers.