Cricket

Yorkshire Chairman faces 15-year ban over BHS audit


FOUND GUILTY

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Yorkshire County Cricket Club has said that it’ll await the full report from FRC before deciding on an appropriate course of action [Pic Credit: yorkshireccc.com] © Agencies

Yorkshire Chairman Steve Denison, who has combined his role at the county with work as a partner at audit firm PricewaterhouseCoopers, has been fined GBP 500,000 and banned from the auditing industry for 15 years. This follows a two year investigation into a PwC audit of BHS, a chain of department shops, which Denison oversaw before the company went into administration in 2016.

The GBP 500,000 fine is one of the largest ever personal fines handed down by the Financial Reporting Council (FRC) although this has been reduced to GBP 325,000 for early settlement. In addition, PwC have received a fine of some GBP 10 million after both the company and Denison had, according to a FRC statement released on Tuesday evening, “admitted misconduct”. Denison, who was the lead partner on the audit of BHS for the period up to the end of August 2014, removed his PwC role from his LinkedIn profile last week.

The PwC audit signed off BHS as a “going concern” just days before the company was sold by its owner Sir Philip Green for just GBP 1 in March 2015 to Dominic Chappell, who had previously been declared bankrupt three times. A little over a year later in April 2016, BHS went into administration, a collapse which left thousands out of work and a GBP 571 million shortfall in the company’s pension pot.

Denison appeared before a parliamentary committee shortly after BHS’s collapse and told the hearing: “The existing management team was trying to turn the business around, and had some success in driving costs down and reducing cash requirements; the cash requirements were lower than the losses shown; and there was a deal which would bring extra cash from the vendor and new cash from the purchaser. Compared with the plans, there was no material uncertainty.”

In response to the FRC sanctions, PwC said: “We recognise and accept that there were serious shortcomings with this audit work and that it is important to learn the necessary lessons. We are sorry that our work fell well below the professional standards expected of us and that we demand of ourselves.”

It remains to be seen whether the verdict affects Denison’s role at Yorkshire. After serving four years on the county’s board, Denison was appointed chairman in 2015 when he replaced current ECB chairman Colin Graves. Denison also currently sits on the county’s Audit Committee as well as the Remuneration Committee and the Nominations and Governance Committee.

“The Directors of The Yorkshire County Cricket Club await the full report of the FRC relating to the conduct of its Chairman Mr Steve Denison in his capacity as an Audit Partner of PWC,” a club statement, sent to Cricbuzz via email, read. “Once all the information has been gleaned, the Board will decide an appropriate course of action.

“No further comment on this matter will be made by the Club, or individuals, until the process has been completed,” the statement added.

© Cricbuzz



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