Global soap and household products manufacturers, Unilever, has announced it will put its statutory audit contract out to tender.
In a market statement the firm, which has operations in 100 countries and sales in over 190 jurisdictions, announced it will 'invite leading accountancy firms' to tender for the external audit contract, worth £15m.
The appointment of the current auditors PwC - who have been the company's auditors for 26 years since 1987 - ends after completion of their audit of the accounts for the year ending 31 December 2013.
Unilever's global media relations director, Lucila Zambrano, told Accountancy that the company is in the process of speaking to potential firms to agree participants in the tender.
'We need to ensure that firms have the appropriate capabilities to manage a large and complex audit such as Unilever, while ensuring a competitive tender.
'This is not primarily about saving money; we have an efficient audit already and the aim is to be at the forefront of good governance. Nevertheless, we are seeking to have a fully competitive tender and will continue to look for opportunities to improve efficiency of the audit wherever possible,' Zambrano said.
Unilever's CFO Jean-Marc Huert said that the company decided to put its statutory audit work out to tender with the intention of nominating a new external auditor for 2014 in order to maintain the company's position as a leader of good governance.
The news follows a raft of tendering announcements among the FTSE, in compliance with the UK's Corporate Governance Code which expects companies to put their external audit out to tender once in 10 years, or explain to the market why they would not do so.
At the same time, the UK's Competition Commission has issued draft proposals in a bid to reform the audit market and break up the domination of the Big Four. If finalised the proposals could compel companies to tender their audits once in five years, with a break clause of up to two years, allowing for deferrals if companies are in the midst of major acquisitions, or other similar transitions.
'Our business is very large in scale and reach, with operations in over a hundred countries. The challenge that this poses for our auditors has been successfully met by PwC over many years and we have always been impressed with the rigour and quality of their audit. However, given changes in the regulatory environment and market expectations, it makes sense for Unilever to rotate its auditors at this time,' said Huert.
'We look forward to continuing to work with PwC as a key provider of other professional services going forward,' he said.
The company intends to conduct the tender process as quickly as possible, so that a decision can be made in time for its 2014 AGM next May.
