Accounting watchdog urged to investigate KPMG over £53m accounting scandal at Ted Baker
The accounting watchdog has been urged to investigate KPMG over a £53m accounting scandal at Ted Baker.
The fashion retailer previously warned it had overestimated stock by up to £25m. But this figure rose to £58m last month after an independent review by accountants at Deloitte.
Probe: Critics said the blunder raised ‘serious questions’ for KPMG, which has audited Ted Baker’s books since 2001
Critics said the blunder raised ‘serious questions’ for KPMG, which has audited Ted Baker’s books since 2001.
Both Prem Sikka – a professor of accounting at Sheffield University who advised MPs on audit reform – and House of Commons business committee chairman Rachel Reeves called on the Financial Reporting Council (FRC) to investigate.
Reeves said: ‘Serious questions need to be answered about how a huge hole in Ted Baker’s balance sheet emerged just months after the auditors signed off the accounts.’ Sikka added: ‘This is not simply a small error. KPMG had a duty to verify and query the inventory.’
The FRC, Ted Baker and KPMG declined to comment.