P&O Ferries has appointed a boutique Oxfordshire-based agency, Simply Audit & Assurance (JAA), as its new auditor following the sudden departure of KPMG earlier this yr.
The appointment marks an uncommon transfer for an organization of P&O Ferries’ dimension.
The transport operator, finest recognized for its Dover-Calais route, carries over 4 million passengers yearly and reported £918 million in income in 2022.
But its 2023 accounts stay greater than eight months overdue, with its former auditor KPMG resigning amid what it described as “difficulties” in making ready the corporate’s newest filings.
Fairly than changing KPMG with one other Huge 4 agency, P&O has turned to JAA—a four-person agency headquartered in Witney, Oxfordshire.
The choice has sparked dialogue about auditor independence and resourcing, particularly given the scale and complexity of the P&O engagement.
JAA’s majority shareholder and audit signatory, Jonathan Russell, defended the agency’s capability and independence, noting that it’s supported by a wider affiliate community of 35 professionals and that its strategy is grounded in expertise quite than scale.
“I can let you know now that the common expertise in auditing of my employees is over 20 years,” Russell stated.
The agency, established to assist smaller firm and charity audits, confirmed it is going to cost £265,000 for the P&O engagement—far lower than the £1.3 million charge charged by KPMG for the 2022 accounts.
Russell stated he believed that determine was “a stupidly excessive quantity,” and argued {that a} decrease charge additional reduces considerations about dependence on a single shopper.
Nonetheless, some consultants stay cautious. Lord Prem Sikka, professor of accounting and a frequent critic of the UK audit market, instructed The Guardian and ITV Information that JAA’s dimension raised “critical questions on auditor independence,” noting that the audit charge might represent a considerable portion of the agency’s annual income.
This, he warned, would possibly create “the worry of dropping a serious shopper” and have an effect on auditor objectivity.
Russell pushed again towards this suggestion:
“My opinion goes to be my opinion. I’m not cash oriented,” he stated.
He additionally claimed that P&O had first contacted him in regards to the position in February 2024, and prompt the transfer mirrored broader dissatisfaction with how audits are presently delivered throughout the market.
“Audit just isn’t essentially now being delivered the way it ought to be,” he stated.
The shake-up at P&O comes throughout a turbulent interval for the Huge 4. All 4 main companies—KPMG, Deloitte, PwC and EY—have confronted employees reductions, charge strain, and reputational scrutiny following a collection of high-profile audit failings.
Some mid-sized and huge companies are actually exploring options, turning to smaller, specialist companies for a extra tailor-made service.
Latest years have seen the emergence of latest entrants comparable to Axiom GRC, Pura Advisory, Unity Advisory and Steppingstone, aiming to capitalise on altering expectations round audit worth and supply.
Regardless of JAA’s unorthodox appointment, Russell stays assured within the agency’s capability to ship.
“Sure, you’ll be able to have a giant title, sure, you’ll be able to have a small title. Does it imply that the audit’s executed any higher or worse? I don’t know.”
