Sainsbury’s drops PwC as auditor after 20 years

Sainsbury’s has dropped PwC as its auditor after 20 years as the accountancy firm faces an investigation into its role in the £263m Tesco accounting scandal.

The supermarket has appointed Ernst & Young (EY) to audit its accounts from March after a formal tender process was conducted, as laid out in the retailer’s 2014 accounts last summer. A spokesman said: “The company flagged its intention to review its auditors last year and the decision was unrelated to events at Tesco.”

But the move comes weeks after the accounting watchdog, the Financial Reporting Council, said it would be examining the role of the accountancy firm and some staff members in relation to the preparation, approval and audit of Tesco’s accounts back to February 2012.

The matter is also being investigated by the Serious Fraud Office.

Just weeks after the arrival of Tesco’s new chief executive, Dave Lewis, in September a team of forensic accountants from Deloitte established that the estimate of first-half profits that Tesco gave the City in August was artificially inflated. Deloitte said £118m of the £263m total overstatement related to the first six months of the current financial year and £145m related to previous years.

Powered by article was written by Sarah Butler, for The Guardian on Friday 16th January 2015 17.31 Europe/London © Guardian News and Media Limited 2010


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