British MPs to question PwC on possible conflict of interest over Thomas Cook following travel giant’s collapse
- It has come to light that for a period of time, PwC performed a dual role as both the Thomas Cook remuneration committee’s adviser and the company’s external auditor
Bosses at PricewaterhouseCoopers will be grilled by British MPs on Tuesday over a possible conflict of interest after it emerged that the accountancy firm advised Thomas Cook executives about their pay and bonuses while it was also the travel company’s external auditor.
A parliamentary inquiry into the collapse of Thomas Cook is under way and is focusing on executive pay, accounting practices and the role of auditors. At a sometimes combative hearing on 15 October, the fallen tour operator’s bosses drew stinging criticism for the millions of pounds of bonuses paid to directors in the years running up to its demise.
In its recent written submission to MPs, the Institute of Directors talked about “the allegedly aggressive accounting methods” adopted at Thomas Cook. Meanwhile, in recent days both MPs and the IoD have voiced concerns that directors’ pay and bonuses were calculated on profit numbers that excluded one-off negative items. “Were accounting judgments therefore being affected by executive pay considerations?” asked the IoD.
