(Bloomberg) J Sainsbury Plc will appoint Ernst & Young LLP as auditor, ending a relationship with PricewaterhouseCoopers LLC dating back about two decades.
Ernst & Young will take over after this year’s annual general meeting of the U.K. supermarket company, Sainsbury said today in a statement. The decision follows a tender process overseen by the grocer’s audit committee.
Sainsbury’s relationship with PwC dates back to 1994 when the company appointed Coopers & Lybrand as joint auditor. The grocer had flagged it was seeking a new auditor in its annual report, published in June last year.
A Sainsbury spokesman said the decision to replace PwC was unrelated to developments at larger competitor Tesco Plc, which is also a client of the auditor. Tesco’s accounts for the past three financial years are being investigated by the Financial Reporting Council after a 263 million-pound ($400 million) overstatement of profit forecasts.
Audit tendering across the U.K.’s 350 largest listed companies has risen significantly over the last three years, according to PwC, which predicts a further increase in 2015. Research conducted last year showed two out of three companies that invited tenders since October 2012 were changing auditors.
“Audit committees are responding to a highly dynamic audit market due to the introduction of mandatory tendering and audit firm rotation rules,” James Chalmers, U.K. head of assurance for PwC, said by e-mail. “It is for our clients to determine how we can best serve them and we are pleased that we have been successful in winning new audit mandates as a consequence of the new regime.”
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