Auditor ranking race narrows as FTSE 100 firms spread out
Prized FTSE 100 clients are now more evenly spread out among the Big Four accountancy giants than at any time in almost 15 years, with some of the UK’s top auditors losing out to their rivals after an intense year of scrutiny and high-profile failures.
The blue-chip client league table for auditors has “never been closer”, according to the latest report from Adviser Rankings, which found that frontrunner PricewaterhouseCoopers (PwC) and KPMG both shed FTSE 100 clients in the last quarter.
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EY was the chief beneficiary of the twin declines, hoovering up audit duties from the likes of BHP Group, Vodafone and SSE.
With the regulatory requirement for FTSE 100 and FTSE 250 that listed firms must conduct an audit tender at least every 10 years and rotate auditors every 20 years, the majority of FTSE 100 and FTSE 250 tenders have led to a change in auditor over recent years, consequently spreading the auditors of top-tier clients more evenly among the so-called “Big Four”.
In 2005, the range of FTSE 100 clients for the Big Four was from 19 to 41 clients for EY and PwC respectively, but that range has narrowed to 22 clients for EY and 27 for PwC.
Competition for top business clients among Britain’s auditors has come under scrutiny following several high-profile scandals and corporate accounting failures in the past 12 months.
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Last month KPMG was fined £3.5m by Britain’s accounting watchdog for failing to audit client accounts of BNY Mellon bank properly, marking the latest in a string of fines for a top accountancy group.
The August Corporate Advisers Rankings Guide also found Brunswick kept its lead as the financial PR group with the most FTSE 100 clients.