P&O Ferries has appointed a small Oxfordshire firm, Just Audit & Assurance, to handle £1.3m audit after KPMG resigned in March, as it says fee will be a million less
Just Audit & Assurance claims it can cut the audit fee to £265,000, criticising KPMG’s fee as a ‘stupidly high number’.
The Big Four firm resigned as auditor of P&O Ferries and parent company, P&O Ferries Division Holdings Ltd, after continued major delays to filing annual accounts for several years.
Now P&O Ferries, ultimately owned by Dubai-based DP Group, has turned to Just Audit & Assurance, a very small audit firm owned by chartered accountant and auditor Jonathan Russell with a total staff of four.
Russell is the founder owner and director of Just Audit & Assurance Limited and sister firm, chartered accountants Rees Russell LLP, both based in Witney, Hampshire.
The audit arm of the business only has four staff, including directors Russell and Martin Wright. Russell is the majority stakeholder and an accounting veteran with 40 years of experience, while the second director Wright has been in audit for 30 years.
Russell and Wright are the firm’s responsible individuals (RIs) with authority to sign off audit reports, and are both chartered accountants and members of ICAEW. While Just Audit & Assurance only has two staff besides the directors, sister firm Rees Russell has 11 staff, and these can be shared across projects and audit work.
Russell told ITV the appointment would cut audit fees by more than three quarters, suggesting the firm would only charge P&O £265,000 for the annual audit, adding that KPMG’s audit fees of £1.3m for the FY22 audit was ‘a stupidly high number’.
‘You can have a big name, yes, you can have a small name. Does it mean that audit’s done any better or worse,’ Russell said. ‘I don’t know. I can tell you that the average experience in auditing of my staff is over 20 years.’
The first priority for Just Audit & Assurance will be to finish the audit for the financial year ended 31 December 2023, which KPMG said it had been unable to finish due to continual late filing of accounts. The FY23 accounts are months overdue.
P&O Ferries is nine months late filing FY23 accounts at Companies House, missing the 30 September 2024 deadline.
This is the third year in a row that P&O Ferries has failed to file on time and the company will face Companies House penalties for this, raising questions about corporate governance at the business.
The FY22 full accounts were only filed on 20 February 2025 making the work of any audit firm a challenge.
The Financial Reporting Council and ICAEW, as regulator of smaller audit firms like Just Audit & Assurance, needs to keep tabs on progress to ensure corporate governance rules are followed.
KPMG’s resignation letter from March stated: ‘In our professional judgement, it is not possible to compete an audit of the 2023 accounts to the required standard within management’s desired timetable.’
KPMG said a number of issues forced them to resign, including the late filing of the 2022 accounts, the firm’s judgement that some of the drivers of that delay remain, and the fact that, as a result of the late filing, to date the firm had ‘performed very limited work’ on the statutory audit for the year ended 31 December 2023.
Just Audit & Assurance files fileted accounts at Companies House which means it is not required to disclose a P&L and balance sheet, but reported shareholder funds of £94,678 for year end April 2024. Neither Just Audit & Assurance nor Rees Russell LLP were ranked in the Business & Accountancy Daily Top 75 Firms Survey, indicating total fee income of less than £6m.
Russell originally trained at Critchleys where he was a partner for 25 years, until he set up his own firm in 2006, after buying out the Witney office of Critchleys. Private equity backed Gravita bought Critchleys in 2024.
Clarification: Just Audit Limited, Nottingham, has no connection whatsoever with Just Audit and Assurance Limited.
The company said in a statement: ‘Just Audit Limited is not associated in any way with Just Audit and Assurance. Just Audit Limited is not the newly appointed auditor for P&O Ferries. P&O Ferries does not fit the client profile.
‘Just Audit Limited employs a team of nearly 20, including 13 professional audit staff, with two responsible individuals, authorised to sign off audit reports.’
KPMG quits £1.3m P&O Ferries audit over late filing issues | 7 May 2025