PWC has replaced BDO as auditors of FTSE 250 real estate investor Derwent London, highlighting the difficulty mid-tier firms have in increasing their share of the large-listed audit market despite sweeping reforms to the market.
In a statement to the stock exchange, Derwent said PwC has been appointed as auditor for the 2014 financial year, subject to approval at the next AGM. BDO was paid £300,000 in audit fees, according to Financial Director’s Audit Fees Survey.
Derwent, which owns and manages an investment portfolio of 5.5 million square feet, announced in its 2012 accounts that the audit had been tendered “in line with best practice”.
EU and UK rules are currently coming into force that will encourage greater competition in the audit market by forcing companies to switch the firm’s that vet their accounts on a regular basis.
Mid-tier firms such as BDO, Grant Thornton and Mazars, had hoped the change would open up the market to firms outside the Big Four. However, they are yet to make any inroads into the market with every FTSE 350 audit to have changed hands over the past 12 months going from one Big Four firm to another.
Stephen Young, chairman of Derwent’s audit committee, said: “We are grateful to BDO for their contribution as Derwent London’s auditor and, prior to that, Derwent Valley’s auditor over many years. We look forward to working with PwC.”