EY Bags the Elephant With UBS Audit Deal
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UBS selects EY as its auditor for the expanded bank following its takeover of Credit Suisse in March. PwC will audit Credit Suisse’s books for 2023.
EY will have lots more work to do at UBS starting next year, having been retained to audit the merged entity starting next. The Big Four firm has been auditing UBS’s books since 1998, charging it $70 million last year for its services, while Credit Suisse paid PwC $90 million.
EZ declined to comment on whether it was retained by UBS, saying only that The size and scale of the global EY financial services audit practice means we are able to access resource and specialist skills from across our network.
The firm can tap into a global staff of about 20,000 bank auditors. The source told the FT that EY’s international operations are more closely integrated than those of its rivals, making it easier for resources to be shared internationally.
The report went on to say that EY will probably have to drop the work that it does for Credit Suisse to avoid conflicts of interest. The auditor was hired about two years ago by Credit Suisse to look into anti-money laundering measures in its Asian wealth unit.
PwC has a much shorter relationship with Credit Suisse than EY does with UBS. In 2020, PwC replaced KPMG as Credit Suisse’s external auditor. Earlier this year, Credit Suisse had to delay the release of its annual report after an SEC inquiry.
The report came out mere days before Credit Suisse was taken over by UBS on March 19.
On March 10 the SEC asked the bank to explain how it concluded entity-level material weakness did not exist for fiscal years 2021 and 2022, according to the documents.
EY is not without blemish, having signed off on the books of German fintech Wirecard which collapsed in 2020. It was subsequently barred for two years from bidding for audit contracts for publicly listed companies in Germany.
UBS, Credit Suisse, and PwC declined to comment to the FT.
Questions & Answers
Q.Which firm will audit the combined UBS entity from next year?
Which firm will audit the combined UBS entity from next year?
EY will audit the expanded bank, having been selected as UBS's auditor following its takeover of Credit Suisse. It has audited UBS's books since 1998, with the merged entity audit beginning next year.
Q.What is the primary reason EY will likely have to stop its current work for Credit Suisse?
What is the primary reason EY will likely have to stop its current work for Credit Suisse?
EY will probably have to drop its work for Credit Suisse to avoid conflicts of interest, as it will be auditing the merged UBS entity. It was previously hired by Credit Suisse to review anti-money laundering measures.
Q.Why was Credit Suisse's annual report delayed earlier this year?
Why was Credit Suisse's annual report delayed earlier this year?
Credit Suisse had to delay its annual report after an SEC inquiry. The SEC asked the bank to explain how it concluded no entity-level material weakness existed for fiscal years 2021 and 2022.
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