KPMG forewarned XL board of accounting woes

KPMG resigned in 2006 as auditor of the collapsed travel company XL Leisure, after forewarning its board it had ignored ‘potential accounting irregularities’and was replaced by and was replaced by BDO Stoy Hayward.

The Sunday Times reports KMPG said in a strongly worded resignation letter the company had ‘not satisfactorily addressed the concerns we had raised about other arrangements and potential accounting irregularities in the financial statements’.

KPMG resigned after staff at XL held up the payment of invoices to airline catering company Alpha Airports. The delay inflated XL’s figures leading up to the listing of its then parent company Avion on the Icelandic stock exchange.

The discovery triggered the departures of Alpha’s chairman, chief executive and finance director, as well as the departure of Steve Tomlinson, XL chief operating officer, and Paul Robinson, chief financial officer.

Further reading:

XL grounded after funding dries up

Read The Sunday Times story