Secret accounting: the P&O Group in the inter-war years

During the period 1914–31, the P&O group's financial statements reflected many of the accounting ‘manipulations’ for which Lord Kylsant of the Royal Mail group was prosecuted. The paper examines the accounting practices of P&O during the inter-war period. These relied on extensive use of inner reserves to smooth reported profits. Given the high degree of uncertainty affecting shipping companies during the First World War (in particular the impact of Excess Profits Duty), the reconstruction of ‘actual’ accounts is problematical. None the less, the paper shows the extent to which P&O's reported results during the inter-war years depended on ‘conservative’ accounting before and during the war, and provides a benchmark against which the contemporaneous accounting practices of the Royal Mail group may be assessed.