Cut-price Rentokil-KPMG deal raises ethical questions for audit profession

Abstract

KPMG said it is receiving interest in its cut-price audit package after successfully winning a bid to take on the audit of Rentokil Initial from Big Four rival PricewaterhouseCoopers. Under the arrangement, KPMG would undertake all the statutory responsibilities associated with an external audit, while also delving deeper and offering advice on internal audit issues. Some observers say the arrangement would not be a viable option for companies with a dual listing in the US, owing to strict independence guidelines or bright lines set down by the Securities and Exchange Commission.