Avantegarde wrote:I am not an investor in Patisserie, or an accountant, or even a customer. But I had a look at the 2017 annual report. Total stated income was £114m from 198 shops plus a single bakery supplying other similar businesses. So excluding the bakery, that was an annual income of £575,758 per shop, or £11,072 per week. Was that credible, from selling coffee and cakes? I don't think so. Assuming an average spend of £7.50 per customer (an expensive cake and a coffee), that suggested each outlet served 1,476 customers per week or 211 per day. In my view, those figures would have been literally unbelievable.
That is of course the point I was making, or rather the point that the UKSA article was making. I hate being cynical, but you need to ask what on earth the auditors were thinking about when signing off that sort of thing. Better, maybe we should be asking what sort of training auditors get these days, or, maybe even better, what use these international standards of audit are?
Auditors apparently just plug in numbers to some sort of algorithm and if it comes out OK they sign off. Folks who read my scribbling will know that I am very keen on looking at the culture of companies and that should also be required of auditors. That is far more important than looking at the numbers. If they can trust the management the numbers become a box ticking exercise to look for the odd mistake. Fundamentally can they trust the management or not. In my professional life (I was not an auditor) I always sorted out the wheat from the chaff in my mind. Then I knew who I could trust and who not.
Dod