The UK regulator Financial Reporting Council fined Forvis Mazars and audit partner David Allen about £600,000 for “numerous, serious and pervasive failings” in the audit of former catalog retailer Studio Retail. The firm had signed off the 2021 accounts as a going concern, a judgment later proved wrong when the company entered administration in 2022 and left shareholders with total losses.

Studio Retail collapsed eight months after the audit, wiping out shareholders and exposing creditors to losses before Mike Ashley’s Frasers Group bought the business out of administration. The regulator said auditors showed a “lack of professional scepticism” in testing cash‑flow forecasts and miscalculated credit‑loss provisions, breaching audit standards. FRC highlighted that evidence gathering was insufficient, undermining reliability of going‑concern assessment.

FRC issued a severe reprimand to the firm and partner, signalling tighter supervision of mid‑tier auditors. The sanction arrives as the sector strives to match Big Four quality after years of criticism for lagging investment in technology and training. By discounting the penalty from an original £1 million, regulators rewarded cooperation but underscored that audit failures still carry hefty costs significantly.