Grant Thornton UK chief executive Malcolm Gomersall has defended the accounting firm’s private equity ownership, arguing that Cinven’s investment has increased scrutiny of audit quality rather than undermining it, according top a report by the Financial Times.
European buyout firm Cinven acquired a 60% stake in Grant Thornton in 2024 in a transaction that valued the UK accounting group at about £1.5bn. The deal was the largest PE investment in a UK accounting firm and helped accelerate a broader wave of PE-backed transactions across the sector.
Gomersall said the prospect of a future sale of Cinven’s stake creates an incentive to maintain the firm’s reputation and standards. A business with concerns over audit quality, he argued, would be harder to sell to a future owner.
He also said Grant Thornton would not accept an audit engagement involving a company in which Cinven had an investment, while the firm had taken a cautious approach to situations where private equity ownership creates uncertainty over auditor independence.
In one instance, Grant Thornton consulted the Financial Reporting Council over whether a prospective engagement presented an independence issue. The regulator determined that the situation represented a potential grey area, after which Grant Thornton decided not to take on the client.
The issue of auditor independence has become increasingly prominent as private equity firms invest in accounting practices. Critics have raised concerns that the focus on financial returns could create pressure on firms to prioritise growth at the expense of audit quality, particularly where the same private equity group has interests in both an accounting firm’s ownership structure and its client base.
More than 1,000 accountancy practices globally have received private equity investment over the past decade, according to a report from the International Federation of Accountants, with activity accelerating from 2022.
