Latest news with #auditing
Yahoo
14-06-2025
- Business
- Yahoo
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 – whom 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 is 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 (JAA), 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, JAA'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 JAA'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. 'So you know, yes, you can have a big name; yes, you can have a small name. Does it mean that the audits are 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.' JAA 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. JAA 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.
The Guardian
13-06-2025
- Business
- The Guardian
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.
Free Malaysia Today
28-05-2025
- Business
- Free Malaysia Today
Major audit firms have been complicit in financial scandals, says Anwar
Prime Minister Anwar Ibrahim said the focus on good governance and auditing should go beyond merely attracting investments. (Bernama pic) PUTRAJAYA : Prime Minister Anwar Ibrahim today said that major audit firms have, at times, been complicit in financial scandals, citing the 1MDB affair as an example. Without identifying any auditor in particular, he said no auditors 'were entirely free from being targeted'. 'If you look at 1MDB, (you will see the) complicity of big audit firms,' he said at the closing of the Asean Auditor Conference 2025 here. The 1MDB scandal, which US authorities dubbed the largest kleptocracy ever, saw over US$4 billion embezzled from the state investment arm. In 2023, Anwar was reported as saying that the scandal would not have occurred if not for the 'complicity' of international financial institutions, including Goldman Sachs. Speaking today, Anwar said the focus on good governance and auditing should go beyond merely attracting investments. 'That (auditing), to me, is critical but not pivotal,' he said. He also underscored the importance of strengthening audit institutions to ensure true accountability. 'That's why to my mind, it is a particularly important endeavour that audit institutions be empowered, to operate independently and to follow the trail of accountability wherever it leads,' he said. Referring to his experience as head of government, Anwar said he had no intention of interfering in the auditing process. As head of government, Anwar said his job was to present the findings of the audit department to the Cabinet, which would then be tabled and debated in Parliament. 'That is what we mean by good governance and transparency,' he said.
Malay Mail
28-05-2025
- Business
- Malay Mail
Anwar urges Asean to empower independent auditors, says it's key to building trust and investment
PUTRAJAYA, May 28 — Prime Minister Datuk Seri Anwar Ibrahim today called for stronger governance systems and independent audit institutions across Asean. He said that improving the quality of audits and financial reporting would provide investors and stakeholders with reliable data to support regional economic integration. 'Some say good audits help attract investment. I say good auditing is more than a tool for investment, it is a responsibility,' he said during his closing remarks at the Asean Auditor's Conference 2025 here today. The prime minister said that upholding the highest standards of accountability requires continued efforts, including empowering independent auditors and regulatory bodies to carry out their duties effectively. 'Even large global audit firms haven't always remained free from scandal or complicity, as seen in the 1MDB case,' he said, referring to the multibillion-ringgit corruption scandal involving the misappropriation of funds from 1Malaysia Development Berhad. 'This is why audit institutions must be truly independent and able to follow accountability wherever it leads,' he added. He also said he does not interfere in audit findings, adding that this approach helps strengthen governance and contributes to improving Malaysia's position in the Corruption Perceptions Index.
Zawya
19-05-2025
- Business
- Zawya
EY negligently missed huge fraud at collapsed UAE hospital operator, $3bln UK trial hears
EY failed to spot a major fraud by main shareholders of UAE hospital operator NMC Health in what lawyers for the firm's administrators described as disgraceful auditing, at the start of a roughly $3 billion London trial on Monday. The administrators of NMC – a FTSE 100 company when it collapsed in 2020 after disclosing more than $4 billion in hidden debt – are suing over audits from 2012 to 2018, when EY gave an unqualified opinion that NMC's accounts were accurate. The company's administrators Alvarez & Marsal say EY, one of the world's "Big Four" auditors and formerly known as Ernst & Young, was negligent in failing to get proper access to NMC's books, missing billions in unreported borrowing. EY, however, denies the negligence allegation and argues that it was NMC's own senior personnel who perpetrated the fraud and manipulated its accounts, hiding the fraud from EY. The 12-week trial at the High Court which began on Monday is the latest lawsuit brought against a major auditor and comes after recent criticism of EY specifically over work for travel firm Thomas Cook and German payments company Wirecard. NMC Health PLC listed in London in 2012 and joined the FTSE 100 in 2017, before short-seller Muddy Waters questioned its financials in December 2019 sending NMC's shares tumbling by almost a third in a day. NMC's administrators were seeking up to 2.7 billion pounds from EY in damages for losses, largely relating to undisclosed guarantees, but court filings for the trial put the figure at around 2 billion pounds plus interest. Their lawyer Simon Salzedo said EY's audits over seven years were among the "most fundamentally flawed examples of big-firm auditing that have disgraced a courtroom in this jurisdiction". Salzedo accepted that auditors giving a wrong opinion did not amount to negligence, but said: "Two wrong opinions looks very much like carelessness and to give seven in a row is rather harder to explain away." But EY's lawyers argued in court filings the auditing firm was "itself a principal target and victim of the fraud" committed by NMC staff for the benefit of its principal shareholders. NMC's case was based on expecting an auditor "to do the impossible by uncovering a pervasive and collusive fraud being practised and covered up in effect by the directors and management", EY's lawyers said. NMC has separately brought litigation against its founder BR Shetty, who denies any wrongdoing, and others in London, the UAE and the United States. (Reporting by Sam Tobin Editing by Tomasz Janowski)
