PwC dropped by Sainsbury’s after 20 years of representation

After 20 years of being their auditor, PwC – one of “the Big Four” accountancy firms – have been dropped like a hot potato by Sainsbury’s, after facing an investigation into the £263m Tesco accounting outrage.

It has been confirmed that EY will now be appointed as auditors for Sainsbury’s from March 2015 following a formal tender process in 2014 and as stated in their accounts.

Sainsbury's decided to de-instruct PwC after recommendations by its audit committee and also as a result of increased audit rotation. A spokesman for the supermarket giant also stated that the company highlighted its intention to review its auditors last year and confirmed the decision was not related to events over at Tesco.

Chairman of Sainsbury's audit committee, Gary Hughes, said;

“We would like to thank PwC, and specifically the Sainsbury's audit partners, for their significant contribution as the company's auditors over many years. Going forward we expect an orderly transition and look forward to working with EY into the future.”

Tesco accounting scandal

In December, the FRC launched an investigation into Tesco's accounting ‘black hole’ and audit work that had been carried out by PwC - it is also being investigated separately by the SFO (Serious Fraud Office).

Going back further to September 2014, a team of Deloitte forensic accountants identified that the first half profit estimate that Tesco gave the City was falsely inflated.

Since this time, PwC has said that companies were changing auditors frequently as a result of new regulations and as a result, it had gained as well as lost clients.

What do you think about ‘the Big Four’ and the Tesco accounting scandal? Let us know your thoughts on Twitter and remember that we are here to provide honest, impartial advice for your company for whenever you need it.

Omni Chartered Accountants are here to save you money, time and hassle – call 01902 837408 today or click here to contact us by email. You can also request a call back by selecting the tab at the top of the page.