KPMG is to take over as auditors to Royal Mail from next year, ending EY’s 28-year relationship with the postal services company, after the company acknowledged that changes in the audit market with respect to best practice meant a review was required.
According to the latest annual report, EY was paid a total of £6.2m for audit and audit services at Royal Mail in 2013.
Earlier this year, Royal Mail confirmed that it would be undertaking a tender process for its audit arrangements. In its annual report and accounts, the company stated that in January 2014 it had decided to hold a competitive tender, ‘in the light of emerging best practice and new requirements with respect to audit tenure.’
Royal Mail said that the incumbent auditors, EY, had been in place since 1986 and the company had not undertaken a competitive tender process since that date.
That process is now complete, and the company released a statement saying: ‘Royal Mail is pleased to announce that KPMG will be appointed as its independent auditor from 2015-16 onwards, subject to approval by its shareholders at the Annual General Meeting, to be held in July 2015.
‘EY will continue in its current role as Royal Mail's independent auditor until the end of the 2015 AGM, during which time it will complete the audit of the 2014-15 accounts. EY will work closely with KPMG to ensure a smooth transition.’
