KPMG loses Shell audit
PwC appointed to one of biggest global audit contracts as sole auditor
KPMG has lost one of the biggest audits of public companies – its joint audit
of Royal Dutch/Shell.
In a stock exchange announcement this morning the newly merged firm, which
spent $55m (£30m) on audit fees and audit-related fees in 2004, said that it
would move to PricewaterhouseCoopers as its sole auditor.
Chief financial officer, Peter Voser, said the move did not reflect on the
quality of KPMG’s work.
‘The choice of a single audit firm for the company is another step towards
simplification and standardisation of our processes,’ he said. ‘We are pleased
to continue with PricewaterhouseCoopers as our sole auditor. We also look
forward to working with KPMG as a provider of non-audit services. We would like
to express our appreciation for the excellent professional service we have
received from both KPMG and PricewaterhouseCoopers over the years.’
KPMG and PwC earned $70m (£39m) from Shell last year in audit and non-audit
fees. PwC has been the long-standing auditor of Shell Transport and Trading, the
UK arm of the business, while KPMG had audited Royal Dutch. It is understood
that PwC had historically received the lion’s share of Shell’s fees.
If KPMG were to pick up a sizeable chunk of the non-audit work, the move by
Shell might also not be too painful, with non-audit work delivering higher
margins.
