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July 19, 2019 07:38 PM

European Companies with Frequent Auditor Changes

Posted by jmckeon

This analysis was originally posted by Audit Analytics.

 

While much of the concern surrounding audits in Europe revolves around long tenures – audit firms auditing the same client for years, or even decades, on end – it is perhaps more of a concern when a company switches its auditor very frequently.

Using the Audit Analytics’ European databases, we identified a few companies that had multiple auditors in a short amount of time.

Laura Ashley Holdings PLC (ALY: London Stock Exchange)

Laura Ashley Holdings PLC has engaged multiple auditors during the last few years, though one change was due to a merger.


Laura Ashley was audited by Chantrey Vellacott DFK LLP from 2004 to 2015. On May 1, 2015, Chantrey merged with top ten auditing firm Moore Stephens LLP and retained the name Moore Stephens LLP. Following this merger, the Company reappointed Moore Stephens for fiscal year 2016.

On April 18, 2017, Moore Stephens resigned as the auditor, confirming that there were no circumstances in connection with its resignation that needed to be brought to the attention of the Company’s members or creditors.

The Company engaged Crowe Clark Whitehill LLP, effective April 27, 2017. The firm was reappointed at the 2017 annual general meeting (AGM). Following the reappointment, the auditor submitted a fee proposal for the year ending June 30, 2018, which was higher than the fees charged for the 2017 audit. The directors did not accept the proposal and indicated that they wished to appoint another firm. As a result, Crowe Clark Whitehill resigned as the auditor of the Company.

On May 9, 2018, UHY Hacker Young LLP was appointed as the auditor with immediate effect.

In December 2018, the Company announced the closing of 40 stores due to poor trading conditions which could explain why Laura Ashley wished to appoint a different audit firm that offered lower prices.

Sanochemia Pharmazeutika AG (SAC: XETRA)

Sanochemia Pharmazeutika AG has had four separate auditors since 2013: Grant Thornton, Immunitas, Profida, and now TPA.


From 2009 to 2013, Sanochemia was audited by Grant Thornton UniTreu GmbH. Not long after their IPO on November 8, 2013, Immunitas Wirtschaftsprüfung GmbH was appointed as the Company’s auditor during the March 13, 2014 AGM. Immunitas audited Sanochemia for three years until the 2017 AGM, at which time Profida Wirtschaftsprüfung mbH was appointed as the auditor. The following year at the 2018 AGM, TPA Wirtschaftsprüfung GmbH was appointed as the auditor.

The Company did not announce any issues or concerns to explain the changes in audit firms.

MKB Nedsense (NEDSE: Euronext Amsterdam)

MKB had four different auditors in four consecutive years, going from KPMG, to BDO, to Mazars, and most recently Accon.


MKB Nedsense was audited by KPMG Accountants NV from least 1999 (oldest available annual report) to 2014. On November 4, 2015, the Company’s Supervisory Board engaged BDO Audit & Assurance as auditor but shortly after, on April 26, 2016, appointed Mazars Paardekooper Hoffman Accountants NV. At the AGM on January 2, 2018, with unanimous shareholder authorization, the Supervisory Board appointed Accon avm controlpraktijk BV as the auditor for fiscal year 2017.

MKB Nedsense is a subsidiary of Value8 N.V., which also changed its auditor from Mazars to Accon for the 2017 year.

AS Rigas kugu buvetava (RKB1R: Nasdaq OMX Riga)

AS Rigas kugu buvetava (Riga Shipyard) has had four different audit firms over the course of five years.


In 2013, Riga Shipyard was audited by UHY Orients N Ltd, who had been the auditor since 2003. During the 2014 AGM, the Company appointed “Lataudit” as their auditor. However, by the time the 2014 annual report was released, the Company released an audit report signed by SIA “Deloitte Audits Latvia.” (This was captured in our database as an unannounced auditor change.)

Deloitte was reappointed for the 2015 fiscal year. In 2016, the Company engaged Orients Audit & Finance SIA, previously known as UHY Orients N Ltd prior to leaving the UHY network in 2014. Orients was reappointed during the 2017 AGM, but in April 2018, the Company held an EGM (extraordinary general meeting) where they decided to appoint Nexia Audit Advice SIA as the auditor for the 2017 year.

This late EGM pushed the publication of the Company’s 2017 annual report back by two months.

For more information on this analysis, please contact us by emailinginfo@auditanalytics.com or call 508-476-7007.

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