Monday 16 November 2020 12:00 pm

Auditor independence rules prompt PwC to sell data software to private equity house

Big four auditor PwC has sold its in-house data capture software to private equity house Souter Investments as auditor independent rules mean the firm cannot effectively grow the business.

The software enables PwC to digitalise and search large volumes of complex legal derivative contracts for clients. It takes contracts from clients and converts them into readable formats, which the software can then search for relevant data. 

Read more: PwC to take over from KPMG as M&G’s external auditor

Under Souter Investments the data capture software, previously known as eBAM, has been rebranded to Likezero. 

PwC said it decided to sell the software to maximise its value, given the market limitations of the auditor continuing to own the software – under auditor independence rules PwC cannot sell the software to a firms it audits, and so the giant felt it was not best placed to grow the business. 

PwC would not disclose how much it sold the technology for.

The big four firm has bought a license so it can continue to use the software. As a result, no work will be impacted by the sale. 

Read more: Home working could cost UK economy £15bn a year, PwC warns

PwC director Jason Williams said: “eBAM has been developed in-house by PwC over the course of the last four years and delivers a much needed solution in the contract analysis space.”

Likezero chief executive Michael Lines added: “This is a hugely exciting moment for our business. In today’s highly complex, unpredictable and regulated world, the ability for financial institutions to understand and manage their counterparty risk has become a critical function. 

“Events such as Brexit, the cessation of Libor and the implementation of new regulations such as the new margin rules for uncleared over-the-counter derivatives, or indeed the impact of a global pandemic, all make the assessment of risk increasingly challenging.”

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