Security company G4S has become the latest FTSE 100 company to change its external auditor, with the announcement that the group intends to hire PwC to replace incumbent KPMG which has handled the audit since 2005
G4S signalled its intention to put its audit out to tender in the group’s 2013 annual report and accounts, which stated: ‘As part of the committee’s review of the objectivity and effectiveness of the audit process, a detailed assessment was undertaken in 2013 as to whether the group should consider putting the external audit engagement out to tender. The committee concluded it was appropriate to undertake a full tender process for external audit services’.
KPMG has audited the company since 2005, with G4S in its annual report describing this as ‘a complex exercise involving over 1,000 KPMG personnel’. The firm was paid £8m in total in 2013, made up of £1m in fees for the audit of the company’s annual report and accounts, £6m for the audit of its subsidiaries and £1m in fees for other services.
In its statement, G4S said KPMG will undertake the audit of the group's consolidated accounts for the year ending 31 December 2014, having been reappointed at the 2014 annual general meeting (AGM). Following finalisation of the terms of their engagement, the appointment of PwC will be recommended to shareholders for approval at the 2015 AGM.
PwC will take over the audit contract for the year ending 31 December 2015.
G4S’s annual report indicated that it planned to assess responses to the audit tender using detailed criteria which incorporated key aspects of the Financial Reporting Council’s audit quality framework, including organisation, capability and service delivery, audit quality, audit approach, and team capability and fit.
Separately, KPMG has picked up an audit in the AIM market, with the announcement that the firm is to replace Baker Tilly as auditors to natural resources company Rose Petroleum with immediate effect.
Matthew Idiens, group CEO Rose Petroleum, said: ‘Following a tender process, we have now appointed KPMG. We feel with the expected growth in the company as we advance through the drilling stage, they are the right calibre of adviser to assist Rose. I would also like to thank Baker Tilly, who we have worked closely with for the past 10 years, but a new era is dawning.’
Lynton Richmond, audit partner at KPMG, said: ‘We are delighted to have been appointed as auditor to Rose Petroleum and look forward to working with the team.’
