Auditor Tenure among Nordic Indices

Posted by WALTER WILLEY - Feb 11, 2019

In this post, we look at the longest auditor tenures of the companies in the top Nordic indices. This includes a review of 136 companies, with only one having a joint audit.

As shown in the graph below, eight of these 136 companies, or 6%, have an auditor tenure of over 25 years. This is contrasted to 56% of the companies with an auditor relationship of ten years or less. Thirty percent of the companies have an auditor relationship spanning between 11-20 years, and 9% have engaged their auditor between 21-25 years.

PricewaterhouseCoopers has audited Kone Oyj (KNEBV: NASDAQ OMX Helsinki), a Finnish company included in the OMX H25, since 1957 – the longest auditor tenure among companies in the Nordic indices. Other companies with tenures over 25 years are listed in the table below.

These companies could soon be up for rotation in 2020, according to the EU transition rules on Mandatory Firm Rotation. However, all of the EU Nordic countries adopted the option to permit an extension of the audit engagement following a tender or, in some countries, a dual audit.

Worth noting, 18 of the 23 companies in the top Nordic indices that now have auditor tenures between 11-15 years were due to rotate in 2016 or 2017 but decided to retain their current auditor. It will be interesting to see whether the extended engagements go to term, or whether these companies will decide to rotate earlier than required.

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