British American Tobacco is looking for a new auditor after extinguishing its agreement with Big Four firm PwC.
The Lucky Strike owner said in a statement to the London Stock Exchange that PwC would not seek reappointment as the group’s auditor after completing the 2014 financial accounts. PwC has audited the tobacco giant’s accounts since BAT listed in September 1998.
BAT said its decision, which was jointly taken with the accounting firm, was the result of proposed litigation by a group subsidiary against PwC.
“The potential claims against PwC, which have been assigned to the group, arose from work carried out by PwC in relation to the audit of the accounts of a third party,” BAT added in the statement. “These claims do not concern the audit of any BAT Group company.”
BAT has invited the remaining three firms which make up the Big Four accounting group’s – Deloitte, EY and KPMG – to tender for the auditor contract, with a resolution at the AGM to ask shareholders to confirm the appointment of the successful firm.
BAT confirmed the potential litigation related to long-running disagreement with paper maker Windward Prospects over the cost of cleaning up polluted rivers in the US. The tobacco company is weighing up legal action against Windward and its previous advisors, which included PwC.
It is the latest lost contract for PwC and follows Sainsbury’s in January appointing rival EY to take over the job of auditing its accounts this year. PwC is currently under investigation by accounting watchdog the Financial Reporting Council for its involvement in the external audit of Tesco’s results for 2011-12, 2012-13 and 2013-14.
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