News
Jessica Fino 4 Dec 2017 11:55am

PwC could lose Vodafone audit over conflict of interest

PwC could be at risk of losing Vodafone as an audit client, following the collapse of mobile retailer Phones 4U

Vodafone has alerted the Big Four firm that it may be forced to tender its audit contract, according to Sky News.

The telecommunications provider has also made contact with Deloitte, EY and KPMG, warning them that it might replace PwC amid fears of litigation related to the collapse of Phones 4U, a source close to Vodafone was reported as saying.

PwC has been Vodafone’s auditor since 2014, the same year that Phones 4U entered bankruptcy.

The firm is also the administrator of the mobile retailer, which is planning to sue Vodafone for its alleged role in the downfall of the company.

Vodafone, O2 and EE have been accused of colluding to pull their contracts from Phones 4U and triggering its bankruptcy.

If the litigation goes ahead, this would represent a conflict of interest to the accountancy firm, due to its involvement with both companies.

Earlier this year, PwC lost its audit of BT to KPMG, ending a 33-year relationship. One month later, the Financial Reporting Council announced it was investigating the firm’s audit of BT following a £530m accounting scandal in its Italian arm.

PwC has declined to comment and Vodafone has been approached for comment.

Additionally today, the latest Auditor Rankings from Adviser Rankings found that KPMG has overtaken PwC in the FTSE 250 audit market. PwC dropped to third place in the final quarter, however remained far ahead in the FTSE 100 rankings with 35 clients.

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