Diageo drops PwC for KPMG

Diageo drops PwC for KPMG

PricewaterhouseCoopers this week lost its first major audit client since its formation on 1 July when food and drinks giant Diageo dropped the firm as its auditor in favour of KPMG, reports Phillip Inman

The decision came as a blow to the firm, which had expected strong links with the finance director and audit committee chairman to hold off the challenge from its Big Five rival. Both firms had pitched strongly for the prestigious FTSE-100 audit since Diageo was formed in May from the merger of Guinness and Grand Metropolitan.

Two weeks ago, the company confirmed it would tell shareholders at an extraordinary general meeting next month which firm they should endorse, following the publication of documents on 20 October setting out the board’s views.

Diageo’s audit committee and the finance department were heavily involved in the decision. Finance director Phil Yea came from Guinness which was audited by Price Waterhouse, while audit committee chairman Keith Oates is also the deputy chairman of Marks & Spencer, a PwC client.

These links were expected to defeat any efforts by KPMG, which made six presentations to Diageo, to cling on to the audit. The contract is likely to be worth less than the combined fees paid by Guinness and GrandMet, #2.3m and #4.7m respectively. But the spin-off fees could be worth a further #5m.

PwC, which said it was disappointed but would continue to perform non-audit work for Diageo, finished retraining staff last week in its new audit process TeamAsset.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource