PwC has picked up the role of external auditor to high street retailer Next, which has announced that changes in the regulations around audit rotation mean it is ending a relationship of more than 20 years with EY
In an announcement, Next said it intends to recommend to shareholders, for approval at the 2017 AGM, the appointment of PwC as the auditor of the Next group of companies for the financial year ending 27 January 2018.
Next stated its intention to tender the audit in the group's annual report and accounts for the financial year ending 30 January 2016, saying there would be a tender process following changes to the UK corporate governance code and EU regulation which require audit tendering and rotation.
Current auditor EY will continue in the role and will undertake the audit of the group's consolidated accounts for the financial year ending 28 January 2017, having been reappointed at the 2016 AGM.
The Next statement said: ‘The board would like to thank EY for their significant contribution as the group's auditors for more than 20 years, and also the other firms who took part in the tender.’
In its 2015 annual report, the company explained that the tendering process organised by the audit committee would be undertaken to coincide with the rotation of the current audit partner in 2017/18. In its most recent report, Next stated: ‘The committee remains satisfied with the effectiveness and efficiency of EY but has decided not to invite EY to tender because, by law, EY would be required to rotate off in 2020 and a second tender process only three years later would not be efficient.’
According to the 2016 annual report, Next paid EY a total of £579,000, of which £536,000 related to audit fees, £21,000 to tax compliance work and £22,000 to other assurance services.
