VM Group ends 60-year audit relationship with KPMG

VM Group has ended a roughly 60-year relationship with KPMG, appointing PricewaterhouseCoopers (PwC) as its new external auditor after shareholders approved the change at Tuesday’s annual general meeting.

Moments before shareholders voted on the appointment, a KPMG partner delivered the auditor’s report to members assembled at the Jamaica Pegasus hotel, then took his seat on stage next to directors and senior executives. Minutes later, shareholders approved a resolution appointing PwC as auditor until the next annual meeting. PwC will assume responsibility for auditing VM’s financial statements beginning with the next audit cycle.

VM Group Chairman Michael McMorris sought to dispel any suggestion that the move reflected dissatisfaction with KPMG’s work, telling members the audit engagement had been subjected to a competitive tender process.

“This was the second time we went to tender,” McMorris said at the Jamaica Pegasus Hotel in Kingston.

The first competitive review occurred about 14 years ago, he said, when KPMG successfully retained the engagement. This time, PwC emerged as the winning bidder.

McMorris said the decision was part of a normal governance exercise rather than a response to concerns about audit quality.

“There are no hard feelings,” he told shareholders. “We are still friends.”

The change comes as VM sharpens its focus on governance and risk management, with the annual report pointing to active board oversight of audit, compliance, internal controls and enterprise risk management.

For VM, the change closes out an audit relationship that began when the institution operated as a single building society and continued as the business transformed into a multifaceted financial organisation spanning banking, investments, pensions, insurance services and remittances.

The tender process comes against a backdrop of increased global focus on auditor independence. The European Union’s Audit Regulation, for instance, requires public-interest entities to rotate their audit firm at least every 10 years, with extensions possible to 20 years following a fresh tender, or 24 years under a joint audit arrangement.

Also approved by the membership: the re-election of directors Michael McAnuff-Jones and Jeanne Robinson-Foster.

carolyn.guniss@rjrgleaner.com