Accountancy firm Grant Thornton has been fined more than £700,000 for the botched audit of a client.

The Financial Reporting Council, the accountancy regulator, issued a severe reprimand and a fine of £718,250.

The former partner, Simon Lowe, in charge of the audit of Interserve, an outsourcing firm, was personally fined £70,000 for work relating to the audits of 2015, 2016 and 2017.

The FRC said there was 'a significant public interest' in the audit which had not shown enough scepticism, specifically in relation to an 'Energy from Waste' contract for the construction of a waste treatment facility.

Interserve, a large, high-profile business with a number of public-sector clients, went into administration in 2019. At the time it had revenue of £2.8 billion and a workforce of 68,000.

Claudia Mortimore, deputy executive counsel to the FRC, said: "This is a proportionate package of sanctions in respect of failings over three consecutive audit years. It reflects on one hand the seriousness of certain evidence and scepticism failures in FY 2015 and FY 2016, while recognizing that the adverse findings were limited to discrete areas of large audits."

A spokesperson for Grant Thornton said: "Having co-operated fully with the FRC throughout the course of its investigation into our audits relating to 2015-2017, we are pleased to now conclude this matter.

"Whilst we acknowledge the regulator's findings that certain limited aspects of our work were below expectations in this instance, it's important to note that the findings did not assert that the company's accounts were materially misstated in respect of these matters.

"We have invested significantly in our audit practice since the period in question, to drive consistently high quality and are now seeing the positive outcome of this investment - evidenced most recently in our latest AQR scores."

In September, the Financial Reporting Council fined Grant Thornton £2.34 million over the audit of the troubled café chain Patisserie Valerie.

The high street bakery - which previously had stores in Gloucester and Cheltenham - collapsed in 2019.