PwC quits as Staffline auditor

Big four accounting firm PwC has resigned as auditor for recruitment company Staffline, according to a statement made on the London Stock Exchange.

PwC told the company in its resignation letter that it was standing down as statutory auditor as the group was about to start a competitive tender process.

In the company’s most recent report, PwC highlighted concerns about “material uncertainty” relating to going concern at the company, citing breaches of a covenant attached to its debt facility and longer term cash flow issues.

The audit report said: “In failing to sign and send to the lenders the financial statements by 30 April 2019, the group breached a covenant attached to its debt facility.

“In light of the uncertainties disclosed in relation to future trading results and cash flows, the group has forecasted further covenant breaches for the next 12 months from 30 June 2019 as a result of the increase in net debt and the reduction in underlying profits.”

In a statement Staffline added that “there was mutual agreement with the audit committee not to participate in this process following the completion of the Company’s audit for the year ended 31 December 2018”.