• Register
Return to: Home > News > Big Four > 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

    Time pressure: Facing up to mental health

    In an ‘always on’ culture, it is becoming increasingly difficult to manage a healthy work-life balance. While companies are beginning to address this problem by introducing different support systems, Joe Pickard finds more could be done to ensure the wellbeing of the professions workforce.

    read more

    Venezuela: the race for the dollar

    With a new currency following hyperinflation, large sections of the population emigrating to neighbouring countries, an economy on the brink of collapse and no apparent solution coming from the government, Jonathan Minter finds a profession struggling to stay afloat in Venezuela.

    read more

    Brazil: transparency and control

    Brazilian accountants have an optimistic view of the impact of more-regular reporting and the implications of audit controversies for the profession. Paul Golden reports.

    read more

    Argentina: looking for a clearer view

    The Argentine accounting profession continues to grapple with the impacts of a weak economy and a culture of financial corruption. Paul Golden takes a closer look.

    read more

    Blockchain: adapting to disruptive tech

    In the relatively few years since digital currencies first began using blockchain technology, the array of potential applications has grown significantly – and continues to expand. Dan Balla, Matthew Schell and Dave Uhryniak from Crowe look at how it impacts accountancy.

    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.