• Register
Return to: Home > News > Assurance and Accounting > BT abandons PwC after fraud humiliation to appoint KPMG as auditor

BT abandons PwC after fraud humiliation to appoint KPMG as auditor

BT has replaced PwC with KPMG as its auditor following a fraud scandal at BT Italy in January which wiped £8bn off the company’s market value.

KPMG won its battle with EY for the audit tender, which will begin at the end of the current financial year, subject to a vote at the next shareholder meeting. BT was scheduled to change auditor by 2020 but moved the tender following boardroom fury over PwC failing to detect the lengthy fraud at BT Italy. Deloitte did not contest the contract as it already does technology consulting work for BT.

BT Italy inflated profits over several years through corrupt arrangements with clients and investors. The fraud was uncovered by a whistleblower and it has cost BT £530m through paying loans and cutting cash flow. The company suffered a huge drop in share price within one day, and lost 20% of its stock market value. BT chief executive Gavin Patterson’s pay package was slashed by £4m and 4,000 jobs were cut worldwide.

Bill Michael, senior partner elect at KPMG in the UK said: “We are delighted to have been selected to audit BT. Audit quality continues to be a key priority for audit committees, the investor community, regulators, the profession and society as a whole.”

It is the second FTSE 100 audit scandal to involve PwC in the past two years, the first being with Tesco.

Top Content

    The UK: uncertain waves rule Britannia

    he UK’s accountancy profession is currently in a period of much uncertainty. The Competition and Markets Authority (CMA) has released its review into the listed audit market which could cause the biggest shake-up the profession has seen in years, the Kingman Review has described the Financial Reporting Council (FRC) as not being fit for purpose and called for it to be replaced. All the while the country remains in a deadlock on Brexit negotiations.

    read more

    Views from the Eurozone

    With Brexit looming, populist governments gaining footholds in a number of countries and movements such as the Yellow Jacket protests in France, 2018 was anything but a quite year for the eurozone. Here leaders report to the IAB on their markets.

    read more

    Eastern promise and how to find it

    With China rising as a global power, Jonathan Minter spoke with ShineWing’s Zhang Ke and Marco Carlei at the World Congress of Accountants 2018 in Sydney, to discuss the cultural challenges that occur when Chinese networks look beyond their border, and the dividends available for those who overcome them.

    read more

    Spain: looking to widen demand

    As Spanish accounting professionals prepare for new audit regulations, the Paul Golden asks what they need to do individually and at firm level to maintain and increase demand for their services.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.