Please ensure Javascript is enabled for purposes of website accessibility
February 6, 2023

Slim Pickings For SIG, as It Settles on EY as New Auditor

While the U.K.’s Financial Reporting Council investigates Deloitte’s 2015 and 2016 audits of SIG, the building products distributor has selected EY as its new auditor, according to the Financial Times.

EY was the only Big 4 firm eligible to bid for the SIG contract, which according to The Times newspaper, is worth about £1.6 million a year.

Deloitte was out, as SIG dismissed Deloitte as the company’s auditor in May. KPMG was out because it is SIG’s internal auditor. And PwC was out because it has provided SIG with IT advice, posing a potential conflict of interest, according to the Financial Times article.

Outside of the Big 4, there wasn’t much competition for EY either:

SIG was also unable to ask Grant Thornton, Britain’s fifth-largest accounting firm, to participate in the tender process as the firm declared in March that it would no longer bid for FTSE 350 audit contracts because of the high costs involved and the difficulty of competing with the Big Four. …

BDO, Britain’s sixth-largest accounting firm, also bid for the SIG contract. Gervase MacGregor, a partner at the firm, said BDO was “very disappointed” to have not secured the audit.

“We did pitch, we thought we had a good chance, and we put a very good team on it. We are very disappointed, but it won’t put us off pitching for other large listed companies,” he said.

The FRC probe comes as SIG reviews its historic accounts after a whistleblowing allegation of potential accounting irregularities led to the suspension of some staff for overstating profits over several years, Reuters reported.

SIG said in February that it was working with Deloitte to ensure “the correct accounting treatment,” but in May, 78% of SIG investors voted against Deloitte’s reappointment as auditor.

[FT] [The Times] [Reuters]

Image: iStock/BrasilNut1

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

ChatGPT at PwC

Unable to Bill For It (Yet), PwC Australia Tells Staff They Can’t Use ChatGPT For Client Work

Hate to be the burster of bubbles for anyone out there excited to unload your work on ChatGPT but PwC Australia has told its people that for now, playing around with AI should happen strictly off the clock. Australian Financial Review reports that in this morning’s internal newsletter, PwCers were told not to feed client […]

a kid in business attire working on a laptop

If You Let 23-Year-Olds Sign Off on Audits, You’re Gonna Have a Bad Time

On January 24, short seller Hindenburg Research dropped a report called Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History, in which Hindenburg accuses Indian conglomerate Adani Group of engaging in “a brazen stock manipulation and accounting fraud scheme over the course of decades,” among other things. A […]