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You can find the current article at its original source at https://www.theguardian.com/business/2025/jun/13/po-ferries-hires-tiny-four-person-accounting-firm-to-replace-kpmg
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| P&O Ferries hires tiny four-person accounting firm to replace KPMG | P&O Ferries hires tiny four-person accounting firm to replace KPMG |
| (about 3 hours later) | |
| Move raises questions over governance of ferry company and ‘auditor independence’ of accounting firm | Move raises questions over governance of ferry company and ‘auditor independence’ of accounting firm |
| 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. | 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. | 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.” | 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, 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. | 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. | 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.” | “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.” | 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. | “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. |
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| “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.” | “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. | 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. | 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. |