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PwC offside after Wasps profit error


English rugby giant Wasps have been forced to line up a new auditor after an overstatement of its profits‎ triggered a breach of its agreements with lenders.

Sky News has learnt that ‎Wasps Holdings will announce on Thursday that it intends to appoint Mazars, an accountancy firm, in place of the ‘big four’ firm PricewaterhouseCoopers (PwC).

Sources said that PwC had informed Wasps’ board that it was resigning as the company’s auditor four months after it disclosed that earnings for the year to 30 June 2017 had been overstated by almost 50%.
The mistake related to a £1.1m cash contribution to Wasps Holdings by Derek Richardson, its controlling shareholder, obliging it to ask retail bondholders to approve waivers to the terms of its financing.

Image: The Ricoh Arena in Coventry is the home ground for Wasps
It was an embarrassing error for Wasps Holdings, which owns the Premiership rugby club of the same name, and its home, the Ricoh Arena stadium in Coventry‎.
The team’s best-known players include Joe Launchbury, the ‎England lock, and international team-mate Elliot Daly.

In a statement issued in December, Nick Eastwood, Wasps’ chief executive, said it took “the events and circumstances surrounding the accounting of the cash contribution extremely seriously and have implemented various steps to strengthen the robustness of the group’s reporting and accounting procedures”.
‎Wasps is expected to disclose the proposed change of auditor alongside fully audited results for last year.
“There was a mutual decision between Wasps and PwC to part company,” a source close to the situation said.

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“The ‎relationship since December has been incredibly cordial.”
Neither Wasps nor PwC would comment on Wednesday evening.

Source: Sky

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