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Schroders drops PwC after 50 years

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16th Jan 2013
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FTSE 100 asset management company Schroders has ditched PwC as its auditor in favour of KPMG, ending a half-century relationship with the firm.

Schroders opted for rival audit firm KPMG to scrutinise its books following a tender process which started in spring last year.

US online accounting tabloid GoingConcern.com quoted a recent FT article, saying it was “a sign that big companies are becoming more sensitive to claims they are too cosy with the people vetting their accounts.”

According to the FT, PwC and its predecessor firms had been auditor to Schroders since at least 1959 when it floated on the LSE.

The appointment comes at a key time for KPMG after a tough year in which it recently slashed 275 members of staff in an attempt to streamline the business.

It said it had continued to grow its UK business in a subdued economy and fast-changing marketplace, but had “taken a hard look at our operations to ensure that we stay best positioned to continue providing the best services to our clients as efficiently as possible.”

Long-term audit relationships have been under the spotlight in recent months, resulting in a survey conducted for the Competition Commission on the competitiveness of the market.

It found that more than half of the FTSE 100 had had the same auditor for more than a decade.

More recently the competition watchdog said its investigation into the audit market had not yet uncovered any evidence of collusion among top accounting firms over market share.

James Chalmers, PwC’s UK audit head, told the FT that its loss illustrated how it operated in “a fiercely competitive market” in spite of regulators’ concerns.

With regards to mandatory audit firm rotation, FTSE 100 and FTSE 250 companies were recently asked to put their audit out to tender at least once a decade, while the European Commission has pushed to make listed companies change auditor every six to 12 years.

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