British Steel auditor Mazars resigns over fee disagreement
British Steel’s auditor has resigned, days after the manufacturer reportedly asked the government for financial support to save its operations, including the Scunthorpe steelworks.
The accounting firm Mazars said the troubled Chinese-owned steelmaker had balked at the fees it quoted to sign off the company’s books for this year and was refusing to compensate it for difficulties with the previous year’s audit.
Mazars did not say what fee it had proposed but it was paid £323,000 for its work on the company’s audit in 2020, a year in which British Steel reported revenues of £844m but suffered heavy operating losses.
That year’s audit, the first since British Steel was bought by the Chinese firm Jingye, proved more tricky than expected, according to Mazars.
In a filing at Companies House, Mazars said: “Based on our understanding of the complexity, risk and control environment of the company gained from our prior year audit, we proposed the minimum fee we believed necessary to audit the financial statements of the company to an acceptable level of audit quality.
“Despite extended discussions, the company was not prepared to agree to that minimum fee level.
“Furthermore, to date, the company has also not agreed to pay requested overruns for delays and audit issues arising during the prior year audit.
“Consequently, we have resigned as auditor to the company.”
Mazars said it was not aware of any matters that it should bring to the attention of the company’s creditors.
A British Steel spokesperson said: “Following a tendering exercise, we have appointed another firm to act as our auditors.” The company did not say which firm it had appointed.
The Guardian has approached Mazars for comment.
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