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BDO wins RSM Tenon audit

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4th Feb 2013
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Listed accountancy firm RSM Tenon informed the Stock Exchange on Friday (1 Feb) that it had appointed BDO LLP as its new auditor.

The appointment will be formally ratified at this year’s AGM in December and follows a competitive tendering process that was started in last month after RSM Tenon announced that the resolution to reappoint PwC was not passed at its last annual general meeting. Nearly two-thirds of shareholders voted against the reappointment.

The breakdown in the client-auditor relationship is hardly surprising, as during the 2011-12 financial year the firm was forced to restate its accounts for the years to 30 June 2010 and 2011.

Tenon admitted to “significant errors” in financial statements and posted a loss of £70.6m for the six months to December 2011. By February 2012 the previous CEO and chairman had resigned and the new management announced a 10% cut in employee numbers.

The loss of the ill-fated RSM Tenon audit isn’t the end of the story for PwC. Last August, the Accountancy and Actuarial Discipline Board [now absorbed into the Financial Reporting Council’s new Conduct Committee) announced it was investigating the firm and individuals in relation to the RSM Tenon audits for the 2010 and 2011 financial years, along with  the Big Four firm’s preparation and review of of financial information submitted to the market concerning its acquisition of RSM Bentley Jennison.

According to those close to the story, Tenon’s difficulties can be traced back to its ill-timed expansionist programme under former CEO Andy Raynor, and the struggles it faced after the financial crash of funding the debt it had taken on to buy Bentley Jennison and Vantis.

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