PwC has lost Vodafone as its audit client to EY after Phones4U, a collapsed operator it administrates, launched a legal action against the operator
Vodafone had previously announced it would be putting its audit up for tender after being notified that Phones4Uwas taking legal action against the company.
The phone operator said in December, “While PwC are assessed as independent and will continue as the group’s statutory auditors for the year ending 31 March 2019, it is uncertain how this matter may evolve and whether future developments may give rise to risks to audit independence.”
As a result, Vodafone announced today that EY will start carrying out its audits from the year ending 31 March 2020. The appointment is subject to the approval by shareholders at the next annual general meeting.
PwC has been Vodafone’s auditor since 2014, the same year that Phones 4U entered bankruptcy. Deloitte was Vodafone’s auditor for 26 years before PwC.
Vodafone, O2 and EE have been accused of colluding to pull their contracts from Phones 4U and triggering its insolvency.
David Nish, chairman of the Vodafone audit and risk committee, said, “We thank PwC for their significant contribution as Vodafone’s auditors over recent years and we look forward to working with EY.”
Hywel Ball, EY’s head of audit said, “Over the last week, EY has been proposed as auditors to both Vodafone and Imperial and we are really proud to be working with these leading FTSE 50 businesses. These achievements recognise the breadth and depth of our sector expertise, investments in new technology and unwavering focus on audit quality.”
Last year, PwC also lost its audit of BT to KPMG, ending a 33-year relationship. One month later, the Financial Reporting Council announced it was investigating the firm’s audit of BT following a £530m accounting scandal in its Italian arm.
It was reported yesterday that PwC Italian partner Andrea Alessandri is under “preliminary criminal investigation” for his role in the scandal.