Thursday, February 21, 2019

Are retailers losing faith in PwC?


Less than a month after Tesco confirmed it was ditching PwC, the big four accounting firm has been dropped by another British retailer: John Lewis.

The John Lewis partnership has been with PricewaterhouseCoopers for 20 years, much like Sainsbury’s who dropped the accounting firm in January, now the department store chain is to appoint KPMG as its auditor for the 2016/fiscal year.

Tesco, Britain‘s biggest grocer by market share, was with PwC for 32 years before Chairman John Allan opted for a divorce in May. While it‘s typical for a business to refresh its accounting services, the decision was coincidentally made just as Tesco reported a record-breaking £6.4bn loss in April. 

Sainsbury’s replaced its accountant with Ernst Young in the wake of the investigation that accounting watchdog, The Financial Council, is carrying out on PwC. This is in relation to the £263m profit overstatement scandal Tesco faced towards the end of 2014.

In its Annual Report and Accounts for the year ended 31 January 2015, the Partnership noted that it had initiated an audit tender process for the 2016/17 financial year, in line with good governance practice.

The Chair of John Lewis’s Audit and Risk Committee, Baroness Hogg, said: “We thank PricewaterhouseCoopers for their strong contribution as the Partnership’s auditors over many years and for this coming year. We look forward to working with KPMG or the 2016/17 financial year”.