PracticeAuditKingston Smith refuses demand to resign audit client

Kingston Smith refuses demand to resign audit client

Kingston Smith has refused to resign as auditor to Boustead, despite demands by the FTSE fledgling cash-shell that it go.

Link: Begbies Traynor handle first LLP liquidation

The public row comes amid accusations by the company that Kingston Smith breached client confidentiality.

Boustead blames the firm for ‘uncertainty generated in the press’ about its ability to track down documentation relating to a £2.6m cash asset. Rather than go quietly, on Tuesday the firm issued a statement denying the breach of confidentiality.

The firm said it had ‘outstanding concerns’ over the recovery of the money and pledged to continue working with directors. ‘We have not resigned as auditors at this time as we do not believe it would be in the best interests of Boustead plc’s shareholders or creditors.’

Kingston Smith partner Peter Timms was widely reported in the national press commenting on the search for further information relating to the whereabouts of the ‘missing millions’.

Boustead saw its shares suspended by the FSA pending ‘clarification’ of its financial position.

‘The company believes that the suspension of its shares should continue until the appointment of new auditors and full clarification of the company’s financial position,’ Boustead said in a statement to the London Stock Exchange.

The search for the missing £2.6m has run since Kingston Smith issued a qualification relating to the cash in Boustead’s 31 March 2004 accounts. The qualification was acknowledged when Boustead reported half-year figures at the end of December.

Boustead said the auditor’s action was due to the £2.6m, which was shown within ‘debtors’, but was not possible to verify.

The Financial Services Authority moved to suspend dealing in Boustead’s shares on Monday.

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