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Julia Irvine 9 Nov 2018 12:39pm

KPMG wins Redrow audit tender

KPMG is to take over from PwC as auditor to Redrow plc, the FTSE 250 prestige housebuilder, subject to shareholder approval at the November 2019 agm

If all goes ahead, the Big Four firm will take over for the financial year starting on 1 July next year.

PwC has audited Redrow since 1999 when Price Waterhouse merged with Coopers & Lybrand to form the current firm. By that stage, Coopers had already audited the group for 12 years.

In the 2018 audit committee report, chairman Nick Hewson explained that although Redrow was happy with the audit relationship and was satisfied that the auditors were independent, it recognised that as a FTSE 350 company, it would have to change its statutory auditor “for the June 2020 audit at the latest”.

He said the audit committee had a policy about non-audit work and fee levels in place that ensured the auditors’ objectivity and independence was maintained.

“Appointments in respect of non-audit work require the prior approval of the committee within an established budget,” he wrote. “In addition, no work can be undertaken by the external auditors in any area where there is any identifiable risk that the work of an individual within the external audit firm or the external audit firm generally could conflict or compromise the quality, objectivity or independence of any audit or compliance work undertaken for the group.”

This policy will not affect the incoming auditor as KPMG announced yesterday that it had taken the decision to stop all non-audit work for its FTSE 350 audit clients.

In fact, the other services and non-audit work that PwC has undertaken has dwindled this year when compared to 2017. In addition to the 2018 group audit fee of £187,000, PwC received £20,000 fees for audit-related services (including an independent review of the half yearly financial statements) and £9,100 for tax compliance services (iXBRL tagging).

In 2017, the firm earned £176,000 in audit fees, £20,000 in audit-related services, £408,100 for reporting accountant services and £19,100 for non-audit services.

 

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