Sunrise Holdings ple was formed in 1980 by Ted Stainer. The group has expanded through acquisitions of chains of shops, including women’s and children’s clothes shops. In July 1994, Sunrise acquired Glamour Ltd, a private company which owned four shops selling jewellery and fashion accessories. Sunrise purchased 100 per cent of the issued share capital of Glamour for £700,000 from the company’s five shareholders, all members of the Marsh family who had set up and run the business.

Small & Partners had been Glamour Ltd’s auditors since the company was formed in 1989. They issued an unqualified audit opinion on Glamour’s 1994 accounts in May 1994......................

QUESTIONS FOR DISCUSSION
1. What were the ‘danger signals’ that the Sunday Clarion mentions?
2. How far could it be argued that the collapse of EHG represents an audit 3. What elements of corporate governance in the UK, apart from audit, might be implicated in the collapse of EHG?