Barclays Considers Auditor Change After a Century With PwCHoward Mustoe
Barclays Plc, the U.K.’s second-largest bank by value, said it will consider tendering its audit contract held for 117 years by PricewaterhouseCoopers LLP.
Barclays is considering “how and when a tender process might be implemented, particularly given the transitional provisions suggested by the Financial Reporting Council,” it said in its annual report today. “A recommended course of action will be proposed to the board during 2013.”
The decision shows a softening of the bank’s stance from July 2012 when the bank said in a letter to the U.K.’s Financial Reporting Council that a change of auditor would be “highly disruptive and costly.” HSBC Holdings Plc said earlier this week it will tender its audit contract with KPMG LLP.
PwC, the world’s largest accounting firm, which has held the contract since 1896, was paid 44 million pounds ($66 million) by Barclays for services including audit and tax consulting last year. It received 54 million pounds in 2011.
Derek Nash, a PwC spokesman in London, declined to immediately comment.
Auditors were criticized for not spotting practices that led to the banking crisis that began in 2007. The Economic Affairs Committee of parliament’s upper house in a 2011 report said there were “grave defects in the auditing of banks.”
HSBC, Europe’s largest bank by assets, said it would accept bids for its external audit contract, held by KPMG since 1991. KPMG, the world’s fourth-largest accounting firm by revenue, won the business without a bidding process, the bank said in its annual report this week, and there hasn’t been one since. The winner will be appointed in 2015, it said.
The bank paid KPMG $80.5 million in 2012 for services including audit, tax compliance, computer security and help valuing assets. Chairman Douglas Flint and Marvin Cheung, a non-executive director who is a member of the audit committee, have both worked for KPMG, according to the annual report.
Finance Director Chris Lucas joined Barclays in 2007 from PwC. He said last month he will retire as soon as a successor is found.
Barclays said it recommended PwC should be re-appointed as its auditor at its annual meeting due to be held on April 25 in London for the coming year.
-- Editors: Simone Meier, Keith Campbell