Deloitte will become the corporate auditor for listed companies Booktopia and concrete and quarries group Boral after winning the work from its big four rivals.
The shift follows other listed companies changing their auditor as the year draws to a close, including KPMG winning the audit work for electronic design software company Altium and PwC winning the Bank of Queensland audit.
PwC continues to be the country’s largest corporate auditor despite revenue generated by the service shrinking 1.7 per cent, or $8 million, to $468 million last financial year.
EY, the country’s second-largest audit business, booked an increase in audit revenue of 2.6 per cent, or $11 million, to $428 million.
KPMG’s annual audit revenue was down by 5.4 per cent, or $19.6 million, to $343 million, while Deloitte’s revenue was down by 2 per cent, or $6 million, to $299 million. The data was derived from the firms’ annual audit transparency reports.
The faster-growing advisory arms of the firms means the percentage of business they derive from auditing has fallen to between 13 per cent (Deloitte) and 18.5 per cent (EY).
The corporate regulator has regularly highlighted conflicts of interest as a key concern, after multiple Australian and international investigations into audit quality in 2019 revealed that the big four risked the independence of their audit opinions by also taking on lucrative consulting and tax work for the same companies.
Deloitte won the Boral audit, worth $4.5 million in 2021, from KPMG, and the Booktopia audit, worth $966,576 this year, from PwC. The figures all include non-audit and other tax work done by the firms.
“We believe we have been appointed auditors due to our deep understanding of each business,” said Joanne Gorton, the head of Deloitte’s audit and assurance business.
The firm is also replacing PwC as the external auditor of freight rail transport company Aurizon, funeral company Invocare and Rest Superannuation.
But in a loss for Deloitte, it has been replaced as the auditor of accounting software firm Reckon by BDO. Reckon’s audit was worth $344,150 in 2020 to Deloitte.
PwC lost the Altium audit, worth $US1.46 million ($2.1 million) in 2021, to KPMG, but won the Bank of Queensland audit work, worth $366,000 in 2021, from KPMG.
Deloitte managing partner of audit and assurance Joanne Gorton.
The Australian Securities and Investments Commission’s latest audit inspection report, covering the 12 months to June 2021, found that not enough work was done in 23 per cent of the 115 key audit areas reviewed across 35 files from the six largest audit firms: Deloitte, EY, KPMG, PwC, BDO and Grant Thornton. This is down slightly from 24 per cent in the previous reporting period.
EY had by far the best results of the six major auditing firms. ASIC found the firm did not do enough work on 7 per cent of the key areas of work it did on audits of risk-targeted companies in the 2020-21 financial year.
The comparable results for Deloitte, KPMG and PwC ranged between 25 per cent and 30 per cent.
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