Auditing

After Fraud at Greencore, KPMG Is In, PwC Out

The Irish convenience food company is switching auditors after two years of abuses went undiscovered.
Alan RappeportAugust 20, 2008

In the aftermath of a lengthy fraud at one of its subsidiaries, Irish convenience food company Greencore Group PLC has replaced PricewaterhouseCoopers as its auditor, choosing KPMG instead.

In June, an internal audit found that costs were being hidden in Greencore’s Scottish mineral water division. PwC failed to reveal the $30.87 million (€21 million) fraud and the Institute of Chartered Accountants of Ireland started a probe of the Big Four firm.

In a statement released Tuesday, Greencore said that in light of the fraud its immediate objectives were to, “stabilize the water business and to achieve a very high level of assurance on the financial and internal control environment at the rest of the Group’s businesses.”

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The fraud occurred during a two-year span, and Greencore is seeking compensation for some of the $2.35 million (€1.6 million) it paid to PwC during that time, according to Accountancy Age.

PwC spokesman Steven Silber told CFO.com that the firm does not comment on client matters.

KPMG will be responsible for performing a review of the balance sheets of Greencore’s businesses and assessing the internal controls of each division, the company said.

The fraud and the change of auditors comes at a difficult time for Greencore, as weak a consumer market has slowed its business in the UK, where it is the country’s largest maker of sandwiches. It has also had difficulty with its cooking, sauces, and pickles business.