KPMG wins Glasgow company contract
Aggreko is latest big firm to drop PwC as auditor
The Glasgow-based firm’s decision follows similar announcements this year from John Lewis, Barclays, Sainsbury’s and Tesco.
Aggreko, which three weeks ago dropped out of the FTSE100 and is now listed in the FTSE250, said its recommendation to shareholders followed a formal tender process overseen by the audit committee.
PwC will undertake the external audit for the year ending 31 December 2015, having been reappointed at the 2015 annual general meeting. It is proposed that KPMG takes over for the year ending 31 December 2016.
Barclays also switched to KPMG after using PwC since 1896. John Lewis’s relationship with PwC goes back 20 years but this will end from next year when KPMG will take over the audit.
Sainsbury’s appointed EY as its auditor in January, also after a 20-year relationship with PwC, while Tesco ended 32 years with PwC when it recently appointed Deloitte.
Auditors are facing increasing scrutiny after critics said they had to share the blame for the financial crisis by failing to spot trouble that was brewing.
In an attempt to improve standards and the level of competition among auditors, regulators and the European Union imposed new rules that mean companies are now required to put their audits out to tender every five years.
In spite of this, four accountancy firms – PwC, Deloitte, KPMG and EY – audit most of the companies listed in the FTSE100 index of leading firms. PwC remains the biggest, with about 40 FTSE 100 companies on its books, including supermarket chain WM Morrisons which recently appointed the firm to replace KPMG.
PwC said earlier this year: “The audit market is in a state of flux and highly dynamic, with competition remaining fierce. We expect that over the next five years many large companies will switch their auditors because of new rules. These changes are creating opportunities for us to work with companies in new capacities, including as auditors.”
PwC is being investigated by the accounting watchdog, the Financial Reporting Council, for its auditing of Tesco which was involved in a £263m profits scandal. There is no suggestion that this played any part in any company’s decision to switch auditor.