Opposition to the re-election of PricewaterhouseCoopers as auditor of insurance company Royal & Sun Alliance is expected at its agm tomorrow, after a shareholder activist group highlighted an imbalance in the fees received by the Big Four firm.
Pensions Investment Research Consultants (PIRC) advised shareholders to vote against PwC’s reappointment to RSA, due to the level of non-audit work undertaken by the firm.
The company’s 2003 results showed that while total fees for audit work paid to PwC were £4.3m, the firm received £6.2m during the year for non-audit services, such as assurance work and tax advice.
The group is concerned that the independence and objectivity of the firm during the audit process could be at risk due to the level of fees received for other work PwC undertakes.
But RSA has said it has addressed this issue head on, and sees no controversy in the decision.
‘During the year PricewaterhouseCoopers were, on a number of occasions, engaged as advisors,’ said the company in its annual report. Such appointments are only made in accordance with the protocol developed by the board.
PwC refused to comment. Meanwhile, PIRC has also advised shareholders of HSBC to abstain from voting on the reappointment of KPMG as auditor.
The firm refused to comment.
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