Audit contracts changing hands rapidly after new tendering rules
Audit contracts are changing hands rapidly since the FRC and Competition Commission published their separate recommendations to enforce more frequent tendering of FTSE 350 audits. But recently KPMG managed to hang onto the Standard Chartered audit contract after it went out to tender in August of last year. Read more in our previous blog BIG 4 firm KPMG retains Standard Chartered audit
KPMG have been the banks auditor for 40 years and the big 4 firm earned around £9m last year from the audit.
The bank is the first FTSE 100 business to retain its auditor following a competitive tender process under the new regulations. PwC had previously kept hold of its Schroders audit, but only after KPMG had to walk away from the new contract, having won the tender only to realise it couldn’t do the job because of conflicts of interest.
Since the new regulations were announced many companies have already changed their auditors including Berkeley Group, Marks & Spencer, Unilever, HSBC and British Land, while Vodafone has put its audit contract on the market for the first time in 26 years.
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The UK rules only require a tender process to be conducted, rather than enforcing the company to change auditors, so Standard Chartered was under no obligation to replace KPMG.
Under rules being pushed through in Europe companies will be forced to change their auditors every 20 years.
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