ABB Switches Auditor, Says S. Korea Fraud Not To Blame

Sumaira FH Published May 22, 2017 | 02:45 PM

GENEVA, , (APP - UrduPoint / Pakistan Point News - 22nd May, 2017 ) - Swiss-Swedish engineering giant ABB said Monday it was replacing its auditor Ernst&Young after 16 years, but insisted the shift had nothing to do with embezzlement discovered at its South Korean subsidiary.

ABB said its board intended to appoint Ernst&Young's competitor KPMG as its external auditor as of its financial year 2018, following a year-long tender process. "The proposal is subject to shareholder approval at ABB's 2018 Annual General Meeting," it said in a statement.

The announcement comes after the company announced in February that it had discovered "a sophisticated criminal scheme related to a significant embezzlement and misappropriation of funds" at the South Korean unit.

ABB, a top player in the global electrical engineering sector, was subsequently forced to significantly revise down its net profit for 2016, after taking a pre-tax charge of $73 million (65 million Euros).

But the company insisted Monday that its decision to switch external auditors had nothing to do with that discovery. "We initiated a comprehensive external auditor tendering process in spring 2016 -- way before the embezzlement and misappropriation of funds in South Korea happened," ABB spokesman Domenico Truncellito told AFP by email.