British Telecom has picked KPMG as its new auditing firm, ending a 33-year relationship with PricewaterhouseCoopers, in the wake of an accounting scandal in the telecommunications giant's Italian unit.
Earlier this year, prosecutors in Italy opened a criminal probe into alleged fraud and embezzlement at the company, and BT's continental Europe chief resigned "to pursue other interests" (see BT’s Europe chief Schiolla resigns amid Italy accounting scandal). The company took a 530 million pound ($686 million) writedown and admitted “inappropriate behavior” and “improper accounting practices.”
It reduced its cash flow forecasts 500 million pounds ($647 million), according to the Telegraph.
BT paid 15 million pounds ($19.4 million) in fees to PwC last year under its contract. Ernst & Young reportedly also bid on the lucrative contract, but Deloitte did not because it already provides technology consulting for BT. A PwC spokesperson declined to comment.
KPMG is scheduled to take over the auditing work after this fiscal year ends, subject to shareholder approval at the 2018 general meeting. BT was originally scheduled to retender the bid for auditing services in 2020.
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