Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Financial watchdog probes Interserve audits


The UK’s accounting regulator has launched an investigation into audits of Interserve’s financial statements following the firm’s collapse into administration.

The Financial Reporting Council [FRC] has confirmed that it has opened the probe into audits of Interserve’s 2015, 2016 and 2017 financial statements by accounting and consultancy firm Grant Thornton UK.

Interserve last month applied to go into administration after shareholders voted to reject a debt-for-equity rescue deal that would have eliminated £485M of the company’s £631M debt.

The rejected debt-for-equity deal would have kept the company going but left existing shareholders with just a 5% stake in the company, with Interserve issuing £485M in new shares to its debtors.

The company had run into trouble over delays to construction contracts. Its share price dropped to its lowest point in more than 30 years last November after the company received a claim from waste-to-product manufacturer Renewi which said Interserve had missed a deadline on an energy-from-waste plant in Derby.

News of the FRC’s announcement comes amid pressure on the UK’s ‘big four’ auditors. Last month it was announced by business secretary Greg Clark that a new audit body with stronger legal powers would replace it and take over its probe into KPMG’s audits of Carillion, covering its 2013 to 2017 financial statements.

Clark made the announcement following an independent review led by John Kingman.

The Audit, Reporting & Governance Authority (Arga) will be a statutory body. A government spokesperson also confirmed that Arga will also be given the power to “carry out more comprehensive, visible reviews for greater transparency”.

Like what you’ve read? To receive New Civil Engineer’s daily and weekly newsletters click here.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.