THE SCHRODERS AUDIT is switching to EY from PwC, after a “competitive” tender process.
The Big Four firm will be appointed for the period from 1 January 2018, pending shareholder approval at the 2018 AGM. PwC will stay on as auditor for the 2016 and 2017 financial years.
The news comes in the latest of UK corporations to choose EY as their auditor, including Royal Dutch Shell in May, and Stagecoach in January, among others. Omar Ali, financial services managing partner, EY, said: “We are honoured to include Schroders amongst our UK and global financial services client base, this is another major appointment for our growing financial services audit practice.”
PwC has served as Schroders’ auditor for the past 57 years which ended in March this years following the new EU rules which require firms to put their audit out to tender every 10 years, and change auditor at least every 20 years, which Schroders had to do by 2020.
In 2013, investors had expressed dissatisfaction with the relationship and began looking for a replacement; at that time KPMG was appointed but it went against independence rules, and PwC was reinstated. The company chose to replace PwC by 2017 to “minimise business disruption”.
At this year’s AGM, following Schroders’ announcement in March it would be looking for a new auditor, shareholder opposition to the move dropped to 0.09% of votes, compared to 2.9% opposition in 2014 and 2015.
The UK’s Competition Commission (now Competition and Markets Authority) published a report in 2013 into the competitive audit market for the large firms, and criticised keeping the same auditors for decades. However, there have been consistent warnings that the move would have the opposite effect; instead entrenching the Big Four at the top end of the audit market.