Marks & Spencers has announced its ending its partnership with rival chain PwC
High-street chain Marks & Spencer announced yesterday that it would be changing its auditors to Deloitte, bringing to an end its partnership with rival firm PwC that has lasted since 1926.
When M&S released its annual report for 2012/13, Jeremy Darroch, then chairman of its audit committee, spoke of issues around rotating auditors. “The committee recognises that length of tenure of auditors has been a topic of much debate. It notes that the UK Governance Code is being updated, adding a requirement that the external audit contract be put out to tender at least every ten years. In view of this, the committee intends to conduct a tender of the audit contract during the course of the coming year.”
The news comes as European policymakers continue to discuss whether to enforce new rules on forcing companies to change their auditors every few years in a move to improve transparency. The UK’s regulator has halted plans to enforce a ten-year rotation after protests from companies, instead opting for compulsory retendering.
In a statement, PwC said they expected competition in the audit market to intensify as companies are forced to put contracts out to tender. “Competition in the audit market is fierce and we do expect to see more companies switch auditor in response to regulatory change. We continue to retain and win audit clients, as we have done recently with companies such as HSBC, Hargreaves Lansdown and Ladbrokes.”
PwC has experienced a difficult week, having also lost a €21m contract with Unilever that had lasted 26 years. It is diversifying its business, however, and in October bought global management consultancy firm Booz & Company.