PwC lose audit to KPMG of a multinational consumer goods company
Reckitt Benckiser ends 20-year PwC audit contract
FTSE 100 consumer health giant Reckitt Benckiser Group has announced plans to change auditor with the announcement that KPMG will replace PwC from 2018
Big Four rival KPMG will become auditor for the financial year ending 31 December 2018. This follows a competitive tender process for its statutory audit contract, overseen by Reckitt Benckiser’s audit committee, resulting in a recommendation which was approved by the board.
The current audit is worth an estimated £5.6m in audit fees, with additional non audit services of some £1.4m a year, bringing the total contract up to £7,200. This has fallen in recent years due to the clamp down on the share of non audit services.
PwC has been auditor since 1997 and will continue in its role as per the recent AGM vote on 4 May and undertake the audit of Reckitt Benckiser for the financial year ending 31 December 2017. The appointment of KPMG will be recommended to RB’s shareholders for approval at the 2018 AGM.
In RB’s Annual Report and Accounts for the year ended 31 December 2015, RB’s Audit Committee disclosed that it had commenced a pre-selection process with a number of audit firms in preparation for an audit tender in 2017, with the intention to recommend and have ready for appointment a new auditor at the 2018 AGM.
Ken Hydon, chairman of RB’s audit committee during the tender process, said: ‘We have conducted detailed investigations as part of a thorough audit tender process to ensure that our principal criteria of geographical reach, experience, expertise in the consumer products industry, and cultural fit were met. Subject to shareholder approval, KPMG will be appointed at the 2018 AGM.
‘We would like to extend our appreciation to PwC for its significant contribution to RB and the work it has carried out to provide assurance to the RB Board and shareholders during its time as RB’s auditor.’
Annual appointment of external auditors by AGM is required under UK law since the Audit Regulation and Directive (ARD) was introduced in June 2016. UK and EU law now requires an auditor’s maximum period as auditor to a listed company to be 20 years, with a competitive tender process required at least once every 10 years.
Source: CCH Daily