BusinessCompany NewsBP slashes payouts to advisers

BP slashes payouts to advisers

BP has dramatically cut the amount of cash spent on accountants in 2006, suggesting that the compliance costs for the biggest companies have dropped off sharply

BP’s spending on accountants fell by nearly 66%to just $52m (£27m) in 2006,
comparedwith$151m last year.

The FTSE 100 giant’s extraordinary payout to firms in 2005 was one of the
most remarkable indicators of the regulatory nightmare occasioned by
Sarbanes-Oxley and international financial reporting standards.

The FTSE 100 giant announced in its previous annual filing that it had
shelled out $238m (£136m at last year’s exchange rate) to accountancy firms
during 2005.
It then said that the payout was likely to be a one-off, but it was unclear
precisely to what extent that would prove to be the case.

BP stumped up $73m in 2006 for Ernst & Young’s services, of which only
16% was for non-audit work compared to $87m in 2005, but the real impact was
made in the payments to other accountants.

The corporate has recommended that E&Y be approved to continue as
auditors at its AGM this April but has said that it would be keeping a close eye
on global audit fees in reviewing E&Y’s charges: ‘The audit fees payable to
E&Y are reviewed by the audit committee in the context of other global
companies for cost-effectiveness. E&Y performed further assurance and tax
services that were not prohibited by regulatory or other professional
requirements and were pre-approved by the committee.

‘E&Y is engaged for these services when its expertise and experience of
BP are important. Tax services were awarded either through a full competitive
tender process or following an assessment of the expertise of E&Y compared
to that of other potential service providers.’

BP’s audit committee conceded that its efforts to reduce the non-audit
services provided by E&Y had been partly offset by the harsher regulatory
landscape companies had found themselves occupying: ‘Non-audit services provided
by E&Y have been significantly reduced over recent years but, reflecting
regulatory and reporting developments in the UK and US, audit fees have
increased substantially.’

COMPANY REPORTS

Acambis duo depart

Restructuring at vaccines business Acambis will see a new CFO and chief
executive at the company. CFO David Lawrence and CEO Gordon Cameron headed for
the exit as Acambis announced a 15% workforce reduction and cost-cutting
programme. ACCA-qualified Elizabeth Brown, currently vice president of financial
management and company secretary, has been appointed as acting CFO with
immediate effect.

She has served with Acambis for more than ten years and held her current role
for the last two years. She has been responsible for all financial management
and control within the company and for long-term financial planning. Former
Arrow CFO Ian Garland has been appointed as CEO. Garland was CFO of Arrow during
its takeover by AstraZeneca.

Sony results delayed

Japanese electronics giant Sony has been forced to delay the announcement of its
earnings results for the 2006/07 ending 31 March. The company has blamed this
delay on increased paperwork resulting from tougher accounting rules in the US.
The regulatory filing has been delayed by a few weeks and will now be filed on
16 May. Sony’s American depositary receipts are traded on the New York Stock
Exchange.

Until several years ago, most Japanese IT companies announced their full-year
earnings in mid-May. But in recent years the Stock Exchange has been trying to
persuade companies to finalise their accounts within a month and announce their
results in late April, just ahead of the seven day ‘golden week’ holiday in
Japan.

BT ditches Plusnet FD

Neil Comer, finance director at PlusNet, the internet service provider owned by
BT, has been dismissed along with his company’s chief executive Lee Strafford.
PlusNet was acquired by BT just three months ago but a conflict flared up
between the two executives and BT management. Reports have suggested that
Strafford and Comer clashed with BT over strategic plans for PlusNet.

A BT statement refused to elaborate on the reasons for Strafford and Comer’s
departure: ‘Lee Strafford and Neil Comer have left Plusnet. Neil Laycock has now
taken up the post of acting CEO. BT is confident that the team have the
expertise to drive growth and development for Plusnet in the future. These
departures will not have any bearing on the timetable for integration into BT.’

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