Commenting on the landmark contract win, BDO UK Managing Partner Paul Eagland said, “Audits are becoming increasingly global and complex. By winning the international audit of SAP we are demonstrating BDO’s ability to tackle these complex projects and that we have the technology and expertise to deliver across borders.”
With a continuing series of high profile oversights in auditing work having led to the demise to a succession of major companies, the accounting dominance of PwC, KPMG, EY or Deloitte has fallen under intense scrutiny in the European Union, and in the UK.
While the Financial Reporting Company has resisted calls to formally break up the so-called Big Four, it has stepped up its efforts to police the auditing profession on two fronts – announcing rules to force top accounting and advisory firms to separate profits relating to their different lines of work and stinging the country’s largest professional services firms with record fines for their alleged shortcomings.
One of the major beneficiaries of the shifting regulatory environment has been BDO. The UK’s fifth-largest accounting firm by revenue, last year it was found that BDO had come to hold more listed audit clients than the Big Four. However, while BDO gained 36 listed clients in 2020, these were mainly smaller companies, and the firm still had no audit clients in the FTSE 100, while it only holds 17 in the mid-cap FTSE 250 share index.
BDO’s picking up of SAP’s audit contract from the 2023 financial year represents further progress then, as the software company is its largest ever international client. SAP is the world’s largest provider of business software and has the largest market capitalisation in the DAX-30.
Christopher Sessar, Chief Accounting Officer at SAP, remarked, “BDO convinced us in many ways during the selection process. That includes, among others, the excellent expertise in complex accounting and tax issues, the deep understanding of the SAP business model and the modern and innovative audit concept. We are confident that with BDO we have chosen a very good auditor for SAP and are now pushing the transition process forward together.”
SAP has been audited by KPMG since 2002, but the 20-year association is drawing to an end, as EU regulation around audits means that SAP cannot extent the firm’s mandate. Instead, SAP started its audit tender process early to give the new audit firm sufficient time for onboarding and transition. BDO’s awarding of the contract is set to be formally confirmed at SAP’s annual general meeting in 2022.
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