BT picks KPMG as its new auditor, ending a 33-year relationship with PwC

 
Oliver Gill
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General View Of British Telecom Head Quarters
PwC has been BT's auditor since 1984

BT has picked KPMG to replace PwC as its statutory auditor from next year.

KPMG pipped EY to the role, with PwC set to step down after signing off the 2017/18 accounts. BT made the announcement this morning. It signifies an ending to PwC's 33-year association with the telecoms giant.

BT's plans to change its auditor were confirmed in its annual report, released last month. It was reported late last night the board of BT convened a meeting on Wednesday to finalise its decision.

Read more: BT's overseas operations put under review

It is understood that BT's confidence in PwC had been rocked after a £530m accounting blackhole was revealed in its Italian arm in January. BT had previously been investigating discrepancies in its Italian accounting in 2016 but the extent of the problem was unearthed following an external review conducted by KPMG.

The change to BT's statutory beancounter comes as UK firms are under pressure to rotate auditors in an attempt to facilitate better independence.

But the problem BT faced was that it was left with only two options. Deloitte was not in the running for the position after conducting an extensive piece of work that left it conflicted from the role.

Despite a wealth of mid-tier accountancy firms, FTSE 100 companies such as BT usually need a Big Four accountant to undertake its statutory audit. This is not simply for reputational reasons, it is often dictated in certain contracts such as financing agreements with lenders.

Read more: BT wants to ditch PwC... But can it find a new auditor quickly enough?

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