The company announced in April 2017 it had appointed KPMG to take over, but it had to bring forward the tender as PwC had a joint business relationship with HPE, a software company that Micro Focus is in the process of acquiring.

PwC will pick up the internal audit work, which was formerly carried out by KPMG, while PwC received £10m from Micro Focus for the year to 31 April 2017, £2.8 of which was for the audit.

PwC have been auditors since the company’s IPO in 2005.

‘Due to the size and complexity of the acquisition of the HPE Software Business, the company applied for and was granted permission by the Competition Markets Authority and the Financial Reporting Council to defer their audit tender for a period of two years,’ Micro Focus said in its annual report. ‘Subsequently, the company became aware of a joint business arrangement between PwC and HPE Software which would compromise their independence from the date of completion of the acquisition, targeted for 1 September 2017.’

As a result, the company said, the audit committee undertook a ‘competitive audit tender process’ for the financial period commencing on 1 May 2017.

‘Following a period of due consideration of a report and recommendation from the committee, the board announced on 11 April 2017 its intention to appoint KPMG LLP to become Micro Focus’ external auditors and PwC will be stepping down as external auditors,’ it said.

On the internal audit tender, Micro Focus said in its annual report: ‘Following a tender for internal audit services, led by me in parallel with the external audit tender process outlined above in the period January to April 2017, the board will appoint PwC to provide outsourced internal audit services as soon as PwC are able to be released from the independence requirements as external auditor for FY17. Internal audit services in the intervening period will be provided by Deloitte.’

Micro Focus’ annual report can be read here.