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Out for a pound: KPMG quits Poundworld audit

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7th Feb 2014
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KPMG has resigned as auditor of Poundworld, claiming that the single-price retailer provided it with "misleading information".

A KPMG statement said: “During our audit of the company’s financial statements for the year ended 31 March 2013, we were provided with misleading information concerning the value of stock.  The year-end stocktake results provided to us by the Company were misleading in that they were subsequently found by us to have been materially adjusted to include additional entries which increased the value of stock above the value initially presented to the Company by the third party stocktaking company which carried out the stocktake.  The adjustment to the amount and value of stock was not disclosed or explained to us when the results of the stocktake were initially presented to us."

Although KPMG said that it was able to complete its audit, due to a "deterioration" in the relationship between it and the company's senior management over the accounting matters it resigned as auditor on 30 December.

Chris Edwards, managing director of Poundworld, said in a statement: “The audit qualification and resignation letter contains only the opinion of KPMG, not that of the company and the issue raised by KPMG was resolved appropriately. The accounts filed have been signed off by KPMG and in fact reflect that as a business we improved our EBITDA and value by excess of 20% during the financial year.

“We are confident that our procedures are robust and the business continues with its aggressive expansion plans which will see us open a further 40 stores this year with a capital expenditure of £10 million pounds. We are delighted to have the continuing support of Barclays bank to assist us with these plans.”

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Stepurhan
By stepurhan
10th Feb 2014 10:24

Cheap stock

I think I know where the misleading information came from. The stock value came in at much higher than £1, which KPMG found conflicted with Poundland's stated motto "Everything's a pound". :-)

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By MattG
10th Feb 2014 11:00

Tense meetings with the Auditors?

Maybe the board finally lost it after the 50th time that the auditors asked "and how much is this....?"

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By ireallyshouldknowthisbut
10th Feb 2014 12:09

.

Nice to see KPMG has the balls to do this.

When I worked for them they didn't seem to have quite as much gumption. 

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By justsotax
10th Feb 2014 12:09

not sure KPMG

appreciated the end of audit - they were told they could have any item out of the store...

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