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.”
PwC said that companies were now changing auditors more frequently because of new regulations and it had won as well as lost clients under the new regime.
But the move comes weeks after the accounting watchdog, the Financial Reporting Council, said it would be examining the role of the accountancy firm in relation to the audit of Tesco’s accounts since 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.
