Top auditors fined over ‘serious failings’ at ESL

By Chris Tindall

Accounting firms KPMG and PwC have been fined over their audits of Eddie Stobart Logistics (ESL) for “not satisfying the relevant requirements”.

The Financial Reporting Council (FRC) said there were “numerous, serious and pervasive failings” in PwC’s 2018 audit of ESL and “some serious failings” in KPMG’s 2017 audit. PwC was fined £1.99m and partner Philip Storer £51,000. Both were given severe reprimands.

KPMG was fined £877,000 and former partner Nicola Quayle £45,500 and both were also severely reprimanded.

All received reductions for co-operating with the FRC inquiry.

The FRC said KPMG had resigned as auditor in 2018 due to “a breakdown in their relationship with ESL’s management, following difficulties in obtaining sufficient appropriate audit evidence.” PwC was then recruited.

The FRC said the admitted failings related to audit work carried out on property transactions entered into by ESL and the disclosure in the financial statements regarding those transactions.

The FRC said: “These transactions had a significant effect on ESL’s financial performance, and without the profit generated from them, ESL would have been in a loss-making position.”

A PwC spokeswoman said. “In the years since this work took place, the significant and continuous investment we have made in strengthening audit quality has been borne out through improved inspections results.”

Dutch multinational Janssen Group has acquired UK freight forwarding firm Maltacourt Global Logistics.

This is Janssen’s second logistics acquisition this year, following its takeover of Norman Global Logistics in March. Janssen described Maltacourt as a “highly respected and rapidly growing player”, adding that the deal would drive further expansion in the UK market. Runcorn-based Maltacourt has eight strategically located offices across the UK and employs 65 staff.

It provides a range of logistics services under its brands Maltacourt, Mandarin and Extraordinair.