PRACTICE - KPMG beats E&Y in tender head-to-head

KPMG has snatched its second major audit contract in three months from rival Ernst & Young, following its appointment last week as auditor to construction products supplier United Aggregates.

The two audit firms were forced to compete for the lucrative contract, worth (UK P)650,000 in total in 1996, because of the merger in April between fellow aggregates producers Bardon and Camas to create United Aggregates.

E&Y’s Birmingham office earned (UK P)200,000 in 1996 from its audit of Bardon.

The Camas contract last year was worth (UK P)285,000 in audit fees, and another (UK P)163,000 in non-audit fees to KPMG.

This latest setback comes in the wake of E&Y’s failure in May to land the audit for giant engineering company Lucas Varity Industries. The contract, worth more than (UK P)1m, was awarded to KPMG after a head-to-head beauty parade.

In a statement E&Y said it was ‘disappointed that KPMG is to be appointed sole auditors to Aggregate Industries’. Mark Molyneux, E&Y’s managing partner of the regions, said: ‘We understand we narrowly missed winning.’

E&Y’s Birmingham office has suffered a series of disappointments during the past few months. In April, its head of insolvency John Kelly quit after a row with national insolvency chief Alan Bloom, while in January head of tax Anthony Mehigan defected to rival Arthur Andersen.

But Molyneux countered: ‘Our Midlands practice is in good shape with double-digit growth in this financial year.’