KPMG retains £12m Old Mutual audit contract

KPMG has retained its audit work with Old Mutual, after the insurance and asset management business took its £12m contract to market.

The FTSE 100 life insurer confirmed it had accepted the audit committee’s recommendation that KPMG continue in its role beyond 2016, subject to shareholder approval at the 2016 annual general meeting.

In its 2013 annual report, the company said it would tender its audit contract during 2014 as a result of guidance from the FRC and upcoming changes to European rules. It is the first time the audit has been taken to market since the business floated in 1999.

Old Mutual acknowledged at the time that “independence considerations and potential conflicts of interests will limit the number of firms” that could participate in the bidding.

The company also said financial services experience, a track record with auditing listed entities and presence in “significant markets” that Old Mutual operates in would influence its decision, in addition to proposed strategy, team and fees.

Old Mutual stressed it has “strict controls” over the scope and value of non-audit services permitted for the incumbent firm. In 2013, KPMG earned £2.8m in non-audit fees compared to its £12m audit award.

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