AUDIT - Coopers ditches Eidos as firms get choosy
Computer software giant Eidos last week joined a 40-strong list of audit clients dropped by Coopers & Lybrand in the past two years.
Coopers, which will be succeeded as auditor by KPMG, blamed inadequacies in Eidos’ corporate governance practices for its decision to ditch the job – worth u113,000 last year. It said its high number of audit withdrawals was designed to protect the firm from litigation.
Industry insiders believe KPMG will give the embattled company a year to resolve its corporate governance shortcomings, which include a failure to review the effectiveness of internal financial controls.
KPMG said it is satisfied with Eidos’ commitment to remedy the situation ‘as quickly as possible’. But there is a growing trend for accountancy firms to ‘get tough’ with clients.
KPMG’s audit head, Gerry Acher, confirmed the practice had rejected the opportunity to tender for a ‘household name’ audit worth u100,000, while it was considering dropping clients ‘not worth the fees’.
All the Big Six firms, and most medium-sized practices, now have stringent risk-management procedures designed to protect firms from unnecessary litigation.
A Coopers spokesman said: ‘Five-years ago, you could count the clients we dropped on one hand. But there is now a definite move to be stricter with who we choose to do business.’
Mary Keegan, Price Waterhouse’s director of professional standards, added: ‘We have very strong procedures about which clients we take on. We reappraise our clients on an annual basis.’
