Case 1 — Sandpiper plc

The partner is technically very competent. I think it is the presentation of the issues which he hasn't been crisp enough about (Duncan, audit committee chair)


Sandpiper plc is a listed retail company with a wide ranging global market. Sales had been declining in the UK and there had recently been a change of finance director following the early retirement of the previous incumbent.

Duncan, the chair of the audit committee has a wide range of experience in the financial sector in the City and is a well respected figure outside the company. He is not an accountant. He runs the audit committee effectively. The new finance director, Stuart is a new broom intent on establishing himself and improving the company's systems and reporting effectiveness. The audit partner, Patrick, from a Big Four firm, had been in post for some time and was soon due to rotate off. Stuart found Patrick a bit difficult to work with although this was not considered to be an obstacle to the quality of the accounting.

A key issue for the group was a structural re-organization to make it more cost effective and this was accompanied by the introduction of a major new IT system which had cost a lot more than the board had expected. There was a strong culture in the company to contain costs, including audit fees.


According to the relevant financial statements the board consisted of four executive directors and four non-executive directors. ...

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