Spar to rotate external auditors
By Ann Crotty - Nov 16th 2017, 11:41
The Spar Group is the second JSE-listed company to move to comply with the new requirement of the Independent Regulatory Board for Auditors (Irba) that external auditors be rotated every 10 years. Mandatory audit firm rotation will come into force in 2023.
In March, the JSE informed shareholders it had appointed E&Y as its external auditor to replace KPMG. The move, in response to Irba’s campaign, was announced months before the Gupta-related scandal led to several listed companies dropping KPMG.
On Wednesday, Spar advised shareholders that PwC had been appointed external auditors, replacing Deloittes. "The change in audit firm is effective immediately," the company said. The change had been initiated as a result of the adoption of an audit firm rotation process, it said.
Deloittes has been Spar’s external auditor for 50 years, but its reappointment faced stiff opposition at the February 2017 annual general meeting.
Irba executive director Bernard Agulhas welcomed the move and commended Spar "for recognising the importance of mandatory audit firm rotation as a means to guard the independence of its external auditors".
The Spar board may have had little option but to appoint a new external auditor following its last annual general meeting.
At that meeting, an unprecedented 36% of shareholders voted against the reappointment of Deloittes. The appointment of auditors is an ordinary resolution and only needs the approval of 50% of shareholders.
Remarkably the Public Investment Corporation (PIC), which has 12.52% of Spar, did not vote against the reappointment of Deloittes. Given that the PIC has consistently voted against auditors’ reappointment it seems inevitable it would have voted no at the 2018 meeting.© BusinessLIVE MMXVII
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