PwC to replace rival KPMG in ITV audit role

27 November 2019 Consultancy.uk

Following the news KPMG was not competing to continue in its role as ITV’s external auditor, rival PwC has swooped to pick up the valuable accounting contract. PwC will take over as the broadcaster’s auditor from the end of 2021.

In recent years, the largest members of the accounting and advisory world, headed by the Big Four – Deloitte, EY, KPMG and PwC – have come under mounting pressure to separate their consulting and auditing wings in the UK. In 2018 it was revealed that the prior five years had seen the Big Four extend its dominance of the FTSE 350 auditing scene from 95% to 98%, despite a series of EU and UK reforms aimed at tackling a lack of competition since the 2008 financial crisis.

Fears of both monopolisation and conflicting interests have both grown through 2018, meanwhile, as all of the Big Four were implicated in the collapse of Carillion.

Despite this, the scale and reputation of the Big Four routinely sees top clients trade one of the quartet for another. Last Winter, for example, Scisys appointed EY as its auditor after the resignation of KPMG from the role. Continuing this trend, British broadcast group ITV has appointed PwC to take on its external auditing from 2022, replacing the outgoing KPMG.

PwC to replace KPMG in ITV audit role

"We would like to thank KPMG for its significant contribution as ITV's auditors over recent years. Subject to shareholder approval at the 2021 AGM, we look forward to working with PwC in the future,” said Margaret Ewing, Chair of ITV's Audit and Risk Committee.

Due to the length of its current appointment, KPMG is understood to have not participated in the tender for ITV’s accounting role. KPMG had been ITV’s auditor since December 2003, and will see out its current contract as external auditor to ITV for the current and following financial years ending 31 December 2019 and 31 December 2020 respectively.

KPMG earned £1.5 million for the audit of the ITV’s annual accounts and its subsidiaries for the year ending 31 December 2018. PwC will take over the lucrative gig from the financial year ending 31 December 2021, having also replaced its Big Four rival as the UK auditor of Cineworld. KPMG had held that contract for six years – and was not expected to face another audit tender until 2026. However, Cineworld stated that “in accordance with good corporate governance policy on audit rotation”, it would conduct another tender process for the statutory audit contract.