TUI travel firm and KPMG severe partnership

by Alister POOLE on December 30, 2010

Major UK travel firm TUI has severed its ties with auditing partner KPMG in the wake of a badly handled restatement from its 2009 accounts.

The restatement, which is ongoing after it was revealed that TUI had overstated its 2009 earnings, is to the tune of £88m and has already seen two casualties at the firm. The second being KPMG, but the first was finance director Paul Botwell, who resigned after further problems surfaced from the incident.

KPMG released a statement confirming the strained relationship between auditors and management at TUI. It said that the weak partnership had made it impossible for the company to continue to audit the firm under an appropriate standard.

TUI’s shares dropped nearly 10 per cent after it came to light that customers owed millions in unrecovered money. The mistake had caused TUI to overstate its revenues as it factored in money that had never been received.

The problems have been blamed on growing failures in the travel firm’s operations and to controls within the company’s UK tour business.

TUI had asked PricewaterhouseCoopers to step in and head its annual general meeting, which will take place in February.

Comments on this entry are closed.

Previous post: Travelodge Ireland drops room rates

Next post: UK councils spend millions on foreign drivers