PwC claims E&Y 'shadows' its Lloyds audit

PWC HAS CLAIMED that a ‘shadow’ team from Ernst & Young is looking to dislodge the firm as auditor of Lloyds Banking Group.

In its latest submission to the Competition Commission’s inquiry into the audit market, PwC argued that all the industry sectors had strong audit competition. It cited Ernst & Young’s potential to undertake banking audits, despite E&Y currently not auditing any of the UK’s high street banks.

“Indeed, we are aware that Ernst & Young has a “shadow” audit team in place targeting Lloyds Banking Group,” said PwC in its statement to the commission.

The firm said that it would also set up shadow teams, “to build up relationships with the key stakeholders within the identified target company”.

E&Y’s submission flagged up that it has to “compete aggressively with its competitors in a number of ways, including in relation to audit quality, industry knowledge, expertise and innovation, firm culture and values, price and productivity”.

E&Y refused to comment on PwC’s statement.