Vodafone Group Plc (NASDAQ:VOD) Ceases Auditing Contract with PwC over Controversial Law Suit
Vodafone Group Plc (NASDAQ:VOD) has dropped PwC as its auditing firm after being ensnared in a messy legal battle with administrators from PwC over Phones4U. In light of this, Vodafone recorded a 0.99% gain in stock prices during the recently ended business session having opened at $18.23, trading to a low of $18.20 and high of $18.52 before closing the day at $18.44.
Phones4U Dispute with FTSE 100
Vodafone decided to terminate the services of PwC having served the telecommunication titan for six years.
As mentioned earlier, the two parties are involved in an ongoing legal battle involving the fallen Phones4U in which PwC is affiliated to.
The dispute accentuated PwC’s role as administrators for Phones 4U while still being contracted to Vodafone. Phones4U launched this suit against FTSE 100 group for which Vodafone is a subsidiary. Phones4U went on to win one of these battles in a £120m claim from EE this past month.
Moreover, PwC has been under criticism by Vodafone shareholders for its role as both FTSE 100 group auditor and Phones4U administrator. Standard Life in 2017 pointed out the appointment of PwC by Vodafone as having “created a conflict, regardless of whether litigation against Vodafone was pursued.”
EY, following this appointment, is now the third Big Four firm to be contracted to audit one of Britain’s largest companies in 6 years.
PwC receives this termination of the contract after a €26m earnings from its audit and non-audit errands for Vodafone in 2018. This compared to the telecoms company’s previous auditors Deloitte whose earnings were £13m.
Vodafone Dismisses PricewaterhouseCoopers (PwC) for Ernst & Young LLP (EY)
Vodafone, looking to turn over a new leaf, has given the auditing job to the accounting firm Ernest & Young LLP (EY). This was in light of the contract out last December. Vodafone becomes the second major telecommunication company to dismiss PwC in the last two years.
Another telecommunication company, BT dropped PwC, and contracted KMPG, after working together 33 years.
PwC (PricewaterhouseCoopers) has been the auditing firm for Vodafone since 2014. This was after Vodafone’s 26-year contract with Deloitte ended in 2014.
Ernst & Young LLP Begins Work
EY is expected to begin its work for the telecoms company after PwC’s year audit ending March 2019.
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