BALFOUR BEATTY’S audit is up for grabs later this year after Deloitte gave the FTSE 250 builder a clean bill of health on its going concern.
In the troubled construction firm’s annual report for 2015, incumbent auditor Deloitte said it “had not identified any material uncertainties that may cast significant
doubt on the group’s ability to continue as a going concern”.
The tender process itself will take place during 2015 effective for the year ending 31 December 2016.
In January, the construction giant saw its profits further dented after the completion of a review by KPMG into its troubled UK construction business.
The Big Four firm revealed a plethora of issues in how the UK business was assessing its contract forecasts, which would see its profits reduced by £70m.
KPMG was drafted in last year after Balfour Beatty shocked the markets by revealing a £75m shortfall in its construction division.
The review found a £20m difference in the UK construction business’ reported contract positions at August 2014, and KPMG’s assessment at the same date; and £50m relating to an assessment of contract forecasts and subsequent deterioration in project performance up to the end of December 2014.
The UK corporate governance code suggests that the tender process should be put out no more than two years of the end of the current audit engagement partner’s departure, which would give Balfour Beatty until the end of 2017 to begin the process. However, it has decided the tender should coincide with the last year of the audit partner’s term.
Deloitte, which has served as auditor since 2003, earned £8.4m in fees from Balfour Beatty in the year ending 31 December 2014, of which £3.7m was for non-audit services.
The tender is the latest in what is expected to be a busy few years for the audit market, with listed companies revising their auditor incumbents following a regulatory drive to create more competition in the market.
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