TUI Travel is dropping its auditor KPMG after an accounting blunder forced the tour operator to reinstate £88 million into its accounts.
Europe’s largest travel group said it had enjoyed a “good working relationship” with its auditor but decided it was “appropriate” to draft new auditors following the reinstatement fiasco.
KPMG said relations with some TUI director had become “increasingly strained” following the accounting incident.
KPMG said in a statement: “As a result we are not confident that in the future we could carry out an audit of the company to the appropriate standard.”
The news that TUI had overstated revenue and that there was unrecoverable money owed to the company by customers led to a 10 percent slide in its share price. The problems were attributed to failures in systems and controls at the company’s UK tour operator arm.
The accounting error has already cost chief financial officer Paul Bowtell his job. TUI wrote off an additional £88m on top of a £29m writedown announced in August.
TUI said it would appoint PricewaterhouseCoopers at its annual general meeting in February.