P&O Ferries hires tiny four-person accounting firm to replace KPMG
P&O Ferries has hired a tiny four-person auditing firm to replace the Big Four accountant that resigned from approving its annual accounts in March.
The move appears to raise further questions over the governance and financial health of the company, which has attracted a string of negative headlines after its controversial sacking of 786 mainly British ferry workers in 2022 – who it then replaced with low-cost agency staff from countries including India, the Philippines and Malaysia.
The ferry operator's 2022 accounts were almost 11 months late when they were belatedly published in November of last year and showed that the company spent more than £47m on jettisoning its UK seafarers.
Its 2023 numbers are now eight months behind schedule and in March KPMG, the UK's fourth largest accounting firm, resigned as P&O Ferries' auditor. In its resignation letter, the accountants said: 'It has not been possible to complete an audit of the 2023 accounts to the required standard within management's desired timetable.'
Failure to file company accounts is a criminal offence – albeit one that it rarely punished with anything more than a fine from Companies House.
However, critical comments by outgoing auditors are relatively unusual and when a company changes firms it would typically aim to hire a replacement of a similar size.
P&O Ferries' new auditor is a firm called Just Audit & Assurance, which is based in Witney in Oxfordshire and has four employees – while it says it can 'draw upon' 35 people to audit accounts. The fee for the P&O audit will be about £265,000 – the largest it currently charges and accounting for about 8% of revenues, the firm said. In the 2022 accounts, audit fees were shown to have totalled £1.3m.
Prem Sikka, a professor of accounting and a Labour peer, said: 'There are some serious questions about auditor independence. A small firm of four staff is auditing a giant conglomerate. The fees from this are likely to form a large part of the firm's income and the concern will be that the fear of losing a major client might influence the audit approach.
'P&O Ferries transports more than 4 million passengers a year and employs thousands of people. The public will want to be reassured that the company did not go opinion-shopping and that it is financially sound.'
Jonathan Russell, Just Audit's majority shareholder and one of the firm's two 'responsible individuals' who are authorised to sign off audit reports, told the Guardian and ITV News: 'You can't buy me because I'm not money oriented. So my opinion is going to be my opinion.'
'I understand the question [about Just Audit's size],' he added. 'I feel sometimes that the audit is not necessarily now being delivered how it should be … I used [failed construction group] Carillion as an example on a paper I was presenting … as a set of publicly published accounts that didn't make any sense to me.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
'So you know, yes, you can have a big name, yes, you can have a small name. Does it mean that the audits done any better or worse? I don't know. I can tell you now that the average experience in auditing of my staff is over 20 years.'
Just Audit & Assurance claimed P&O had already informed KPMG that it was being replaced on the 2023 audit when the Big Four firm resigned. KPMG declined to comment.
P&O declined invitations by the Guardian and ITV News to comment. Just Audit added that P&O first approached the firm to audit its accounts last year and that it expects the 2023 accounts to be published by the end of this month.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
26 minutes ago
- Telegraph
Morrisons orders head office staff to work full time
Morrisons has ordered staff working in its head office back to their desks five days a week as the supermarket battles to revive its fortunes. The supermarket is understood to have told its employees based at its headquarters in Bradford that they must work a full five-day week after abandoning a policy which allowed staff to work compressed hours. Previously, staff were required to work 37.5 hours over four and a half days under a flexible working week pilot which the supermarket kicked off in 2020. The decision to revert back to five day weeks, which came into force this month, comes as bosses step up a drive to reinvigorate the supermarket as it loses customers to rivals including Aldi. Rami Baitiéh, who took over as Morrisons chief executive in late 2023, has been spearheading a turnaround effort. Last week, the supermarket said sales grew 4.2pc to £3.9bn in the 13 weeks to April 27, versus a year earlier. Mr Baitiéh said the figures showed it had 'bounced back strongly' after cyber issues in November. However, data from Kantar showed Morrisons' share of the grocery market dipped to 8.4pc in May compared to 8.6pc a year earlier. The head office changes are expected to help Morrisons cope with mounting competition from rivals as they step up a price war. Both Asda and Tesco have said they are expecting profits to take a hit this year as they invest heavily on price cuts. A spokesman for Morrisons said the head office changes would improve customer service and make sure its shelves are better stocked in stores. They added: 'In the context of a relentlessly competitive UK grocery market and widespread increased cost pressures, we have taken the difficult decision to ask our head office colleagues to move their working pattern from 4.5 days to a full five day week.' Staff will still be allowed to work both from home and the office during the week, and individuals may be able to work flexibly if they need to do so. It marks the latest shake-up of Morrisons' office working policy. In 2020, the supermarket introduced a four-day working week for head office workers, saying the change would 'make Morrisons a place where more people will want to join and stay'. Under the scheme, head office workers were asked to work on Saturdays once every four weeks. However, last year, Morrisons said it was changing its requirements following complaints from staff over having to work over the weekend. As part of the update, head office staff switched to a four and a half day week and were not asked to work any Saturdays. Morrisons' rivals have also scaled back flexible working policies since the pandemic. Last year, Asda scrapped its pilot after managers said a 44-hour week over four days trial left them exhausted. Domestic & General, a household appliance specialist employing 3,000 people, said it had received similar feedback from staff following a test of a four-day week. However, a four-day working week policy has received support from some in the Government, with Deputy Prime Minister, Angela Rayner, previously saying: 'If you can deliver within a four-day working week, then why not?' The Government later said this would not be part of its policy plans. Meanwhile, last year, the UK's first medical trial of a four-day working week suggested that there could be benefits to compressing hours. In the study, conducted by the University of Sussex, the policy was found to make employees happier and healthier. However, the company involved in the trial, Thrive, opted against adopting a four-day week full-time after its business suffered. The study found that the policy created some problems 'at a business level, particularly when it came to providing customer service'.
BBC News
28 minutes ago
- BBC News
Concerns Staffordshire parish being 'plundered' for battery sites
An area of South Staffordshire earmarked for eight separate battery energy storage site applications is being "plundered", said a parish council leader. Three battery energy storage systems (BESS) applications have already been approved for Lower Penn, with a further three awaiting decision, said Lower Penn Parish Council. South Staffordshire Council also considered two separate BESS proposals for sites in Flash Lane, Orton, near Wombourne and The Roughs, at Dimmingsdale, in Lower Penn on Tuesday. Steve McEwen, chair of Lower Penn Parish Council, described the 100MW BESS site proposed for Dimmingsdale as a "monster". He said to planning officers: "We urge you to defer this decision to allow much more careful review and assessment – we need more time"It will impose huge detrimental changes to the community of Lower Penn. "This technology is still at an early stage of development – consequently, risks and safety are in question."Congestion is very serious in Lower Penn, just having 500 metres between these installations is so tight. We're being plundered in Lower Penn."The Orton application was approved by just one vote - but the planning committee agreed to defer their decision on the Dimmingsdale proposal after a site visit. This news has been gathered by the Local Democracy Reporting Service. Follow BBC Stoke & Staffordshire on BBC Sounds, Facebook, X and Instagram.
BBC News
28 minutes ago
- BBC News
New Metro trains pulled from service due to leaks
A number of new Tyne and Wear Metro trains were withdrawn from service due to water leaks, operator Nexus has said faults with heating, ventilation and air conditioning units caused the problems on Saturday, which the BBC understands affected four trains.A joint investigation is being carried out with Swiss-manufacturer Stadler. It is understood all but one of the six new models available to passengers are back in said the introduction of the new £362m fleet was the most "complicated and challenging in its history" and apologised to customers. It comes after five of the fleet were pulled in April while a problem with doors was fixed. More trains due Nexus managing director Cathy Massarella and Lucius Gerig, CEO of Stadler Switzerland, said the issues over the last few days, which saw water leak into the carriages, were being said they were working together to rectify any problems as "quickly as possible.""We'd like to apologise to anyone who have been affected by this", a joint statement said. "Please be assured that we are doing everything we can to maintain a good service for customers."The fleet introduction is the biggest and most complex project in the history of the Tyne and Wear Metro and the current phase is the most challenging of any fleet transition project."They added they were taking "a careful and phased approach" to introducing the new trains, which will eventually replace the old fleet that has been operating for more than 40 years first of the new trains made its maiden journey in December, with a series of delays meaning the original target date of summer 2023 was is hoped that all 46 of the new trains will be in use by the end of 2026, with half due by the end of this year. Follow BBC North East on X, Facebook, Nextdoor and Instagram.
