Oxford Instruments to replace KPMG with BDO auditors

09 March 2020 Consultancy.uk 3 min. read
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Mid-tier professional services firm BDO will take up the audit contract of Oxford Instruments from the financial year commencing 1 April 2020. It is the first time the FTSE company has looked outside the Big Four audit firms.

In February 2020, listed logistics management specialist Wincanton announced it was ending a 20-year relationship with Big Four firm KPMG with the appointment of BDO as its external auditor following the conclusion of a formal competitive tender process. KPMG was first appointed to the haulage company when Wincanton listed on the stock exchange in March 2001, and despite holding a new tender for the role in 2016, Wincanton had become increasingly aware that lengthy auditing appointments in the UK are coming under mounting scrutiny.

In Wincanton’s 2019 annual report, the firm admitted that “despite undertaking [a] tender in 2016, KPMG has been the group’s external auditor since it listed in 2001.” As a result, BDO has been selected to replace KPMG as of the new financial year commencing in April 2020.

Now, KPMG has also been replaced as the auditor of Oxford Instruments by BDO. KPMG had been handled Oxford Instruments’ auditor since 1984, but as the UK Audit Regulation and Directive 2016 of meant that UK listed entities are now legally required to change their auditors within 20 years of an initial contract, the firm opted to choose a new auditor from beyond the Big Four of Deloitte, KPMG, EY and PwC.

Oxford Instruments is a manufacturer and research company specialising in high tech scientific products, and reported annual revenues of £333.6 million in 2019. It was the first technology business to be spun out from Oxford University back in 1959 and now operates globally. After a competitive audit tender process overseen by the group’s audit committee, the appointment of BDO was recommended, and has since been approved by the board, subject to approval by shareholders at the company’s September 2020 annual general meeting. KPMG will complete the audit of Oxford Instruments for the year ending 31 March 2020.

Since the collapse of outsourcing giant Carillion, the auditing wings of the Big Four have come under increasing pressure from smaller competitors, looking to eat into their previously secure market share. Elsewhere, in April 2019, the UK’s Competition and Markets Authority (CMA) previously recommended a shake-up of the British audit market, and while it stopped short of calling for a dreaded ‘break up’, it cited the need for legislation to address what it described as “serious competition problems.”