PwC replaced by EY as external auditor at Tate & Lyle
Top UK-based food conglomerate Tate & Lyle has confirmed it has ended a 28-year relationship with former auditors PwC. The food group has now turned to Big Four rivals EY to provide auditing services.
Since its formation in 1970, Tate & Lyle (T&L) quickly grew into the largest sugar cane refinery brand in the UK, but having sold the sugar and golden syrup segments of the business in 2012, the company owes its sustained success to a diversification strategy that has also seen it become an innovative, multifaceted company, branching out into oats and corn, along with many other raw ingredients which enrich the flavour and nutrition of food. This diversification has led to T&L maintaining a position in the FTSE 250 Index, and is also listed in the London Stock Exchange. Now as the foods manufacturer seeks a way to further improve its financial situation, it has selected Big Four firm EY to take over from rival firm PwC as the company’s official auditor.
Despite the 28-year relationship between PwC and Tate & Lyle, the agribusiness announced in early August 2017 that EY would take over as external auditor for the year ending in 31 March 2019, subject to approval from the group’s next AGM scheduled for July 2018. The shift was prompted by new auditor rotation requirements regulations, which aim to prevent compliance violations within long-term auditing partnerships. PwC also lost audit contracts for pub chain Wetherspoons and BT earlier in the year, a contract which the UK’s Financial Reporting Council subsequently announced it had commenced investigating, correlating in particular to a scandal surrounding PwC’s audits of the telecommunication giant’s Italian division. PwC was meanwhile fined $1 million by US authorities for compliance violations during its audit of Merill Lynch in 2014.
Tate & Lyle had reportedly paid a total of £2.7 million to PwC for its auditing services, subsidiaries and pension scheme this year alone, and another £0.1m for non-audit services – and by losing this contract, the firm takes a further knock to its revenue this financial year. The foods group thanked PwC for their services in a statement following the news, saying, “PwC and its predecessor firms, have been the auditor of the company since 1989 and the board would like to thank PwC for its years of diligent service to the company.”
The auditing business remains exceptionally competitive between the Big Four accounting firms, with rivals Deloitte, PwC, EY and KPMG each constantly vying to take business from each other. EY will be relieved at this new contract, having recently experienced a decline over a 12-month period in both audit and non-audit activities across the UK. The firm had recently experienced its own loss of access to BBC and audit-related assurance services, which were taken over by the National Audit Office.
