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Fashion retailer Laura Ashley went into administration during the pandemic © Charlie Bibby/Financial Times

The accounting regulator has “severely reprimanded” the auditor of fashion retailer Laura Ashley, who fell under administration during the pandemic.

The Financial Reporting Council said on Wednesday it had fined UHY Hacker Young £300,000 for failing to carry out its audit of the retailer.

Martin Jones, the firm’s audit partner, was also fined £45,000 and severely reprimanded.

The FRC said the penalties relate to audits of Laura Ashley for fiscal years ending June 2018 and 2019.

The retailer’s revenue and profits “continuously declined” for the four years beginning in 2016. His losses increased tenfold from £1.4m in 2018 to £14m in 2019.

However, the 2018 and 2019 audit reports “noted any material uncertainties related to the use of the going concern assumption,” the FRC said.

Laura Ashley collapsed into administration in March 2020 as a result of the impact of Covid-19 on her business. The retailer had 155 stores and 2,700 employees.

UHY hackers Young and Jones admitted “serious breaches” of their role requirements, meaning the audits “did not obtain reasonable assurance that the financial statements as a whole were free from material misstatement,” the FRC said.

The accounting firm and Jones have agreed to temporarily withdraw from conducting new audits of public companies for at least two years.

Jamie Symington, FRC Deputy Executive Counsel said: “The violations in this case were serious and spanned two audit years, affecting multiple areas of the audit, some of which were fundamental to the proper conduct of the audit.”

UHY Hacker Young said, “We recognize that the audits related to Laura Ashley Holdings for fiscal years 2018 and 2019 fell short of the high standards that we have set for ourselves as a company.”

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