Poundworld’s auditor KPMG resigned in December after it qualified the retailer’s annual accounts, it has emerged.
In the auditor’s resignation letter filed at Companies House it said: “The year-end stocktake results provided to us by the company [Poundworld] were misleading… they were subsequently found to be materially adjusted to include additional entries which increased the value of stock…
“The fact that material undisclosed adjustments were made to the stocktake results has caused us to have significant concerns about the conduct of those charged with the governance of the company who were involved in the presentation of the stocktake results.”
Poundworld has now hired accountants PwC.
KPMG had qualified the retailer’s results, published in January, which showed profits for the year to March 31 slumped 34% to £1.9m. Sales increased 42% to £294m.
In the results senior statutory auditor Chris Hearld, who signed off the accounts, stated: “For virtually all stores not visited by us as part of our audit procedures, the statements of stocktaking and the statements of stock at the end of the financial year derived from them that were presented for our audit contained additional entries which were not in accordance with what had been recorded during the physical checking of stock.
“Whilst these additional entries were subsequently corrected in the financial statements, in our opinion the accounting records kept by the company in relation to its year-end stock position were not adequate.”
A Poundworld spokeswoman told the Daily Telegraph: “There was a small issue regarding stock accounting that was resolved satisfactorily and subsequently the accounts were signed off by KPMG. There will be no continuing issues going forward and we will now be working with PwC – a relationship that we are confident will be a very positive one for the business.”
Poundworld has recently teamed up with Poundshop.com, which is poised to be one of the first online single-price point retailers when it launches. According to a countdown on its website, Poundshop.com will open for business on Saturday.