London-based chartered accountant UHY Hacker Young has been sanctioned by the Financial Reporting Council (FRC) over its handling of auditing for high street furnishings and clothing retailer Laura Ashley.

The issues related to the financial years 2018 and 2019 before the company filed for administration in March 2020.

The FRC said that UHY had not “challenged” the notion that the retailer would “remain in business for the foreseeable future” despite this being identified as a “significant risk” due to the “state of the retail sector”.

It added: “The breaches in this case were serious and spanned two audit years affecting multiple areas of the audits, some which were fundamental to the proper conduct of audit.”

UHY Hacker Young recognised “the audits relating to Laura Ashley for the financial years 2018 and 2019 fell below [our] high standards”.

However it said that the company’s “administration” was “not caused by the issues identified by the regulator’.

It said: “As the FRC has recognised, following the [Laura Ashley] audit we carried out a full external review of our audit control procedures and of our audit compliance and quality systems. As a result, we have enhanced our training and technical team and have implemented a more targeted and intensive training regime for all members of our audit teams.

“We are confident that the numerous and wide-ranging improvements we have put in place following this review have significantly raised the quality of the audits that we undertake and have addressed the issues identified by the FRC.