Leading auditors rule themselves out from acting for Boohoo
Four of the biggest auditors have ruled out acting for fast fashion group Boohoo, after PwC stood down following accusations of staff mistreatment in its supply chain.
The Manchester-based group confirmed yesterday that PwC, which has acted as its auditor since 2014, had stood down following reports that staff at factories in Leicester, which supply Boohoo, are paid as little as £3.50 an hour.
These revelations, published by The Sunday Times, led to Boohoo appointing Alison Levitt QC to carry out an independent review into its supply chain. Levitt's report was published last month and, while she said that she didn't believe Boohoo sought to profit from worker exploitation at factories that supplied it, management had been aware of poor conditions and had not felt responsibility to fix the problems.
PwC is understood to have stood down some time in the past month but the reports emerged this weekend sending Boohoo's shares tumbling yesterday from 315p on Friday to 235.8p wiping £500m off its value.
The Telegraph has now reported that Deloitte, KPMG, BDO and Grant Thornton have all ruled themselves out to replace PwC with EY the only one of the top six auditors in the running and it is not clear whether it is interested in taking on the account. KPMG is prevented from acting as Boohoo's auditor for a year due to a conflict of interest, having carried out recent consulting work for the company.
In a statement yesterday Boohoo said: "The Group would like to place on record that PwC is still the Group's auditor at this time. The Group's Audit Committee has recently launched a competitive tender process for the Group's audit, and will update shareholders at its conclusion. PwC signed an unqualified opinion on the Group's 2020 Financial Statements and having served as the Group's auditor since 2014, is not participating in this process."
