Jessica Fino 21 Sep 2017 11:24am

Mitie replaces Deloitte with BDO as auditors

Mitie has replaced Deloitte with BDO as auditors after a shareholder revolt over the Big Four firm’s reappointment in July

The troubled outsourcing company decided to end its relationship with Deloitte earlier than expected. Previously Mitie said it wanted to have a new auditor in place during the financial year ending 31 March 2018. In its pre-close statement released yesterday, however, it revealed Deloitte had resigned as its auditor with effect from 19 September 2017.

Mitie said it had recently carried out a competitive tender process for the provision of audit services which resulted in Deloitte’s resignation and in the provisional appointment of BDO.

BDO will fill the casual vacancy until Mitie's next annual general meeting, when shareholders will vote on their appointment.

Scott Knight, head of audit at BDO, said, “We look forward to working with Mitie's board and new executive team who are focused on restoring market confidence.”

Mitie said there were “no matters in connection with Deloitte's resignation as auditors which need to be brought to the attention of shareholders”. Deloitte did not comment on the decision.

But in July, days after Deloitte’s reappointment as auditors, the Financial Reporting Council announced it was investigating the firm’s auditing of Mitie’s financial statements.

The investigation followed the discovery of “material errors” in Deloitte’s audits of Mitie’s financial statements during a review by KPMG. This led to a write down of more than £50m in profits at the troubled facilities management group.

Deloitte had been auditing the FTSE 250 company, which employs some 52,000 people around the world, since it was first listed in 1987. This year its audit fee was £1.077m, up from £766,000 in 2016.

Following a string of profit warnings Mitie also announced today that it plans to cut 480 jobs by the end of the financial year and is considering the sale of its property management business as part of its cost-cutting plan.