Oil major BP will propose that global consulting agency Deloitte be appointed as the company’s auditor for the financial year 2018 to its shareholders at BP’s 2018 Annual General Meeting.
BP said on Tuesday that this decision was taken following a competitive audit tender.
In BP’s 2013 annual report, the BP Audit Committee announced its intention to launch a competitive audit tender process in 2016 to appoint a new external auditor effective from 2018.
At the time, the Committee considered the group’s position on audit services following changes to the UK Corporate Governance Code and EU’s regulations concerning the audit market. The Committee examined several options regarding the timing of tendering for BP’s external audit, including the mandatory rotation of the group’s audit firm required by EU regulations.
UK and EU law now requires an auditor’s maximum period as auditor to a listed company to be 20 years, with a competitive tender process required at least once every ten years.
The Committee said in the report for 2013 that it decided to put the audit contract out to tender in 2016 so that a decision can be made and communicated to shareholders at BP’s AGM in 2017 with the new audit services contract becoming effective from 2018.
BP has opted to postpone the choice of its 2018 external auditor until the 2018 AGM while EY, BP’s current external auditor, will be up for appointment as the auditor for 2017 at the next AGM.
Until AGM 2017, EY will continue in its role and will audit BP for the financial year 2016.
Brendan Nelson, Chairman of BP’s Audit Committee, said: “I would like to thank EY for their high professional standards and all they have done to provide assurance to the Board and shareholders during their time as BP’s auditors. Subject to shareholder approval at the 2018 AGM, we look forward to working with Deloitte.”