BDO replaces KPMG as Oxford Instruments auditor
4 Mar 2020
FTSE 250 listed Oxford Instruments plc is planning to switch auditors, appointing its first mid-tier auditor BDO to replace incumbent KPMG after more than three decades
4 Mar 2020
The mid-tier firm will take up the audit contract with effect from the financial year commencing 1 April 2020, the first time the FTSE company has looked outside the Big Four audit firms. The company last put its audit business out to tender in 2014 and at the time reappointed KPMG, which had been auditor since 1984.
In the year ended 31 March 2019, KPMG earned £469,000 in audit fees and £42,000 in non-audit service (NAS) fees. This represents a non-audit to audit fee ratio of 0.09:1.
Based on the UK Audit Regulation and Directive 2016, UK listed entities are legally required to change their auditors within 20 years of a contract being initially signed. This would mean that KPMG had handled Oxford Instruments’ audit business since 2002.
This followed a comprehensive and thorough competitive audit tender process overseen by the audit committee, chaired by Mary Waldner, which recommended the appointment of BDO. This has now been approved by the board, subject to approval by shareholders at the company’s September 2020 annual general meeting.
Before launching the audit tender process, in its half year report released in November 2019, Oxford Instruments stated: ‘Under the rules for audit tendering and rotation implemented in 2016, the group is required to replace our current auditors, KPMG LLP, no later than 31 March 2021, effective for the 31 March 2022 year end.
‘The audit committee has decided to undertake a comprehensive and thorough competitive tender process for the audit in the first quarter of 2020. The committee expects to invite at least one challenger firm to participate in this process.
KPMG will complete the audit of Oxford Instruments for the year ending 31 March 2020.
Oxford Instruments plc is a manufacturer and research company specialising in high tech scientific products and services for scientific research communities, and reported annual revenues of £333.6m in 2019.
It was the first technology business to be spun out from Oxford University back in 1959 and now operates globally. Key market segments include semiconductor and communications, advanced materials, healthcare and life science, and quantum technology.