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Error wipes out Peoples profit for past two years

Scottish and Merseyside Ford retailer Peoples has seen its profits for the past two years wiped out due to an an accountancy error. The group has been hit by a £4.4m write off after unwittingly overstating its assets for a number of years. Instead of a £1.3m profit for 2003, it effectively made an £880,000 loss.

Company auditors, Deloitte and Touche issued a qualified opinion stating that it “did not obtain all the information and explanations necessary for the purposes of the audit”. Peoples has reclaimed £1.3m in tax paid on what has now turned out to be ghost profits, but is still left with a £3.1m shortfall.

“I was alerted to a number of mis-statements within the assets and liabilities recorded by certain subsidiary undertakings both in the current and previous years,” says Peoples chairman Brian Gilda.

“It became apparent that substantial balances could not be verified and far more detailed external accounting was required to be carried out. Internal procedures and controls have been amended and will continue to be reviewed to ensure no future recurrence.

Gilda intends to examine every trading and operational cost within the business to allow the company to return to acceptable financial returns and to grow the group profitably over time.

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