Auditors Under Scrutiny
Audit quality and independence come into question at two different companies 16 May 2018
One of our partners, Louis Barbier, commented to Les Echos (France) on 16 May 2018 about the shareholder opposition to recent auditor re-appointments at certain companies.
SIG plc, the UK building materials group, suffered a large shareholder revolt on the reappointment of Deloitte after the company admitted to repeatedly overstating its profits in previous years. Nearly 80 percent of SIG’s shareholders voted against the reappointment.
A few weeks earlier, KPMG almost suffered the same fate from General Electrics’s (GE) shareholders. Following a year that included an accounting investigation by the Securities Exchange Commission (SEC), GE came under fire to change its 109-year-old auditor over fears that KPMG may no longer be ‘independent’.
The situation at SIG and GE are outliers but suggest that shareholders are increasingly reviewing the auditor’s quality of work; their independence (primarily through tenure); and the amount of fees they are receiving from non-audit related work.
You can access the full article here (in French, subscription required).
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