Grant Thornton speeds up Parmalat review

The accounting firm Grant Thornton International yesterday brought forward a review of its Italian arm after two of its senior executives there were arrested in connection with the Parmalat scandal and amid fears the firm might suffer a string of client defections.

"We have brought forward and beefed up our regular review of that member firm... it was due in 2004 anyway but we're doing it now," a spokesperson said.

The review, which is being carried out by Barry Barber, head of audit & risk at the firm, is being overseen by chief executive David McDonnell. He is also heading a wider investigation into the matter.

Grant Thornton carries out reviews of its member firms every three years to ensure they are adhering to its standards. The reviews usually take less than a week.

A spokesperson for Grant Thornton International said it had been responsible for audits of the accounts of about 17 of Parmalat's 200 subsidiaries. These included Bonlat, a Cayman Islands unit that is at the centre of the suspected fraud. Parmalat, which sells products including milk and fruit juice, has an estimated €10bn (£7bn) missing from its accounts - a scandal that has already been dubbed "Europe's Enron".

One of the Grant Thornton executives arrested, Lorenzo Penca, chairman of the Italian member firm, has since resigned while Maurizio Bianchi, a partner in the Milan office, has been suspended.