Alliance & Leicester has ditched KPMG as its auditor in favour of rival Deloitte & Touche after a beauty parade between the two firms in the interests of ‘good corporate governance’.
Richard Pym, Alliance & Leicester’s group finance director, said: ‘We very much appreciate the long and valued service from KPMG but felt that in the interests of good corporate governance a review and competitive tender of our audit arrangements was appropriate. Deloitte & Touche were selected after careful evaluation of their skills in relation to our business and strategy.’
The new audit contract, worth #400,000, is another triumph for Deloittes after it outstripped its Big Five competitors this year’s Accountancy Age Top 50 league table with the highest growth rate of 21.8%.
KPMG, which has audited Alliance & Leicester’s accounts since 1985, resigned immediately as auditor following confirmation they had lost the tender.
Jane Lodge, Deloittes Birmingham-based audit partner for the contract, said: ‘We are absolutely delighted and very excited at the prospect of working with Alliance & Leicester as it progresses with it’s new strategy. Alliance & Leicester will be a very significant client for our firm.’
In a prolific year for the Big Five firm, Deloittes has gained lucrative audit contracts for Trinity Mirror, the Phoenix Consortium, Royal Bank of Scotland and Amlin.
Deloittes took over in March as auditor of the merged RBS and NatWest group after the bank dropped existing auditors PricewaterhouseCoopers and KPMG.
PwC earned #2.4m in audit fees last year from the RBS audit, while KPMG stands to lose up to #25m in annual audit and advisory fees from NatWest.
RBS is understood to have chosen Deloittes because it did not present conflict of interest problems. Alliance & Leicester’s decision to put the audit contract out to tender comes as the focus on corporate governance and auditor independence increases.
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