PwC set to return as Sainsbury's auditor
Reports in the British press suggest supermarket giant Sainsbury’s is set to re-appoint PwC as its auditor. The move would come a decade after the firm was replaced in the role by Big Four rival EY.
Sainsbury's is a British supermarket and the second largest chain of supermarkets in the UK, with a 14.6% share of UK supermarket sales as of September 2022. For a number of years, the group had been audited by PwC – but that changed in 2014, as the accounting and advisory firm came under scrutiny for its work at another leading supermarket.
PwC was under investigation by accounting watchdog the Financial Reporting Council (FRC) for its involvement in the external audit of Tesco’s results for 2011-12, 2012-13 and 2013-14. As events unfolded, the audit committee of Sainsbury’s recommended to the board that it should change auditor, following a formal tender process. This saw the board announce its intention to the London Stock Exchange to recommend the appointment of EY for the coming financial year.
Now, just shy of a decade later, PwC has been selected to step back into that audit role. EY, which has been the company's auditor since July 2015, will continue in the role and will undertake the group audit for the years ending 2 March 2024 and 1 March 2025 – before being replaced by its Big Four rival for the year ending 28 February 2026.
The contract is reportedly worth £4 million, and comes as so-called ‘comply or explain’ regulations hit the UK’s auditing market. The new rules from the FRC mean that a board should “establish formal and transparent policies and procedures to ensure the independence and effectiveness of internal and external audit functions and satisfy itself on the integrity of financial and narrative statements”.
Beyond auditing, PwC has also continued to work with Sainsbury’s over the last decade. Recently, for example, the PwC website elaborated on how it had helped the supermarket to comply with modern slavery laws, by providing a digital tool, taking “sets of data from inside and outside Sainsbury’s Group” and using PwC’s forensics radar tool to “identify where the most significant potential risks in its business and supply chains lie”.
