The tenure of auditors in the US has come under pressure from investors who claim it is difficult to see how they can remain independent after serving the same client for decades, sometimes as long as a century.
According to the Financial Times, Peter Lundkvist, head of corporate governance at the Swedish national pension fund AP3, said: “The independence of auditors from the company and its management is critical for maintaining investor confidence. In some cases companies have had the same audit firm for more than 100 years. It is very difficult for auditors to claim that they are independent in these cases.”
Lundkvist was responding to concerns about US auditors who served the same client for decade after decade. The FT notes that PwC has served Caterpillar for 89 years while General Electric has used KPMG for 106 years.