Shares in Boohoo have tumbled after the scandal-hit online fashion retailer said it has begun searching for a new auditor, as its current one PwC has quit.
Accounting giant PwC has been the company’s auditor since 2014 but today Boohooo confirmed that it will not take part in the bidding process to continue working with the company.
It comes as Boohoo has been under scrutiny over its business practices since July, with a report having recently found sweatshop conditions across its Leicester supply chain.
Looking for a new accountant: Boohoo said PwC will not take part in the bidding process to continue working with the company
Investigators led by Alison Levitt QC revealed ‘excessive’ hours, life-threatening conditions and illegally low pay across much of the supply chain.
Boohoo’s biggest shareholders have been urged to oust the fashion giant’s billionaire chairman in the wake of the report.
Today, Boohoo said that PwC signed off on an ‘unqualified’ opinion on its accounts for the 2020 financial year and were still its auditors at the moment, but would not be in the future.
Shares in Boohoo ended the day down almost 20 per cent at 254p on Monday. They have now fallen about 32 per cent since the revelations came out in July.
According to David Madden, an analyst at CMC Markets UK, PwC does not want to be associated with Boohoo after the recent scandal.
‘Boohoo is taking steps to run its business in a more ethical manner but it might struggle to attract companies to put their name forward to be its auditor as some accounting firms might not want to be associated with the group,’ he said.
However, PwC has itself been embroiled in a series of scandals in recent years.
Only in August, it emerged PwC was being sued for more than £60million amid claims that a top figure leaked valuable client secrets over a coffee.
PwC is also being sued for negligence, breach of duty and breach of contract by the administrators of Providence Investment Fund, which collapsed four years ago owing investors more than £40million.
Accounting giant PwC has itself been embroiled in a series of scandals in recent years.