Derwent London indicated in its 2012 Report and Accounts that the company would be putting its audit was put out to tender in line with best practice. PwC’s appointment is subject to shareholder approval at the 2014 AGM to be held in May.

As BDO had held the audit for over 25 years, it decided not to participate in the audit tender as a result of the new Financial Reporting Council corporate governance code recommendations around length of audit.

BDO has been the company’s auditor since 1985, when it was known as Derwent Valley before its merger with London Merchant Securities in 2007. The firm was paid £200,000 in fees for the group audit in 2012 and £100,000 for the auditing of subsidiaries.

Stephen Young, chairman of the audit committee at Derwent London, said: ‘We are grateful to BDO for their contribution as Derwent London’s auditor and, prior to that, Derwent Valley’s auditor over many years.  We look forward to working with PwC.’

A BDO spokesperson said: ‘Given the recent audit reform changes and our tenure as auditors to Derwent London, it was right that BDO declined to take part in the audit tender process.’