PwC and its earlier incarnations has held the audit for 33 years, since the early 1980s. This is one of the last listed companies to announce a change of auditor in line with new audit regulations on length of tenure. There are only 12 companies on the FTSE 100 who have had the same auditor for over 30 years according to Accountancy's FTSE 100 auditors survey.

The Big Four firm was paid a total of £14.8m in 2016, including £3m for non-audit services, slightly down on the 2016 figure of just over £15m.

In a statement to the London stock exchange, BT said: ‘Following conclusion of the formal audit tender process led by the company's audit and risk committee, the BT board has approved the proposed appointment of KPMG as auditor.

‘Following completion of the audit of the BT accounts for the 2017/18 financial year by PwC, KPMG will be appointed as auditor subject to approval by shareholders at the annual general meeting in 2018.

‘BT, KPMG and PwC will commence transition planning immediately to ensure a smooth and effective migration during 2017/18’.

In October 2016, BT revealed that an initial internal investigation of accounting practices in its Italian business had identified ‘certain historical accounting errors and areas of management judgement requiring reassessment’. At that time, BT estimated the financial impact on the balance sheet at £145m. Italian authorities are currently investigating.

An independent investigation led by KPMG with law firm Freshfields Bruckhaus Deringer saw the total losses revised upwards to £530m.

In the audit committee commentary in its 2017 annual report, BT states: ‘Italy has been a major area of focus for the committee and the improper practices that came to light in our Italian business via a whistle-blower are extremely disappointing.’

The KPMG investigation ‘identified collusion, circumvention and override of controls within our Italian business that was not identified by our monitoring controls thereby resulting in the misstatement of results going undetected for a number of years.’

As a result of the discovery of the financial irregularities in Italy, BT said it was now taking steps to improve the group’s systems, processes and controls, not only in Italy but also in its shared service centres, in global services and at a group level.

In the wake of the accounting scandal, the company suspended a number of BT Italy’s senior management team who have now left the business, as has the president of BT’s European operations. BT has appointed a new president of our European operations and a new CEO and CFO of BT Italy, from outside the Italian executive management team.

Alex Holt, global head of telecoms and media at KPMG in the UK said: ‘We are delighted to have been selected by the BT Board as their next auditor. We look forward to working with them at a critical point for BT, set against a backdrop of unparalleled industry transformation.’