Sir Michael Rake, the Chairman of BT Group plc (also the former Chairman of KPMG International) presumably wasn’t happy that the $2.4 billion writedown the British telecom giant had to take this past year. No one likes surprises, especially red, multi-billion dollar ones, and after some careful consideration, Rake asked PwC to clean house:
Sir Michael Rake said that PwC changed its personnel after BT expressed its concerns.
He said: “We have reviewed and strengthened our internal audit [function]. We have had discussions with our external auditors and we asked for changes in their team.
“We did a complete review as to what went wrong and why we took longer than we should have to pick up on this issue.”
There is typically some rotation in audit teams working on big accounts but for the client to demand wholesale change is rare. BT had also considered dropping the firm.
SO! Rather than give PwC the heave-ho, cooler heads seem to have prevailed. Since Rake is is a former Klynveldian, that option is out (he left in ’07) and since the FTSE 100 loves the Big 4, that only leaves two options.
Rather than go slumming with E&Y, Deloitte or – God forbid – Grant Thornton or BDO, BT will stick it out with P. Dubs. BUT a knight doesn’t have to like it.