LONDON — The UK Financial Reporting Council (FRC) sanctioned audit firm Forvis Mazars and engagement partner David Allen on July 2, 2026, for audit failings. The sanctions relate to the statutory audit of Studio Retail Group for the financial year ended March 2021.

Forvis Mazars received a financial sanction of £577,125, while David Allen was fined £33,412. The regulator also issued a severe reprimand to both Forvis Mazars and Allen. They admitted serious breaches of the International Standards on Auditing in three areas: expected credit losses, going concern, and financial services income.

The FRC identified failings in two areas it had assessed as key audit matters. The Executive Counsel stated it does not suggest the breaches caused Studio Retail Group's insolvent administration. Studio Retail Group entered administration in February 2022.

The FRC stated there were numerous failings in the audit work on Studio Retail Group's expected credit losses provision, including failures to obtain sufficient appropriate audit evidence. The FRC described the expected credit losses provision as a complex accounting estimate of future credit losses that requires critical judgments.

Audit work on management's use of the going concern basis of accounting was also flawed, according to the FRC. On the day Studio Retail Group entered administration, its administrators sold the trading company and certain other assets in a pre-packaged sale. The FRC noted that creditors of Studio Retail Group suffered a substantial loss in the administration, and shareholders lost their entire investment.