July 4, 2018 / 7:01 AM / 2 years ago

UPDATE 1-EY takes over as SIG auditor as regulator investigates Deloitte

(Adds details on FRC probe, HY trading, background)

July 4 (Reuters) - Britain’s SIG Plc on Wednesday named Ernst & Young LLP as its external auditor, days after UK’s accounting watchdog began an investigation into Deloitte LLP’s audit of the building products group.

Auditing firms Deloitte, PricewaterhouseCoopers LLP and EY have all caught the attention of the Financial Reporting Council (FRC) in recent weeks, as shock corporate failures such as Carillion and Poundworld raised questions over standards in the auditing industry.

The FRC said last week it began an investigation into Deloitte’s audit of two annual financial statements of SIG, focusing on cash and supplier rebates. The regulator is looking into the financial statements for the years ended Dec. 31, 2015 and 2016.

The probe comes as SIG reviews its historic accounts after a whistleblowing allegation of potential irregularities led to the suspension of some staff for overstating profits over several years.

SIG, which supplies insulation and roofing products, maintained its expectations for the full-year underlying profit.

The company said group revenues from continuing operations rose 0.6 percent for the six months ended June 30, as higher demand in mainland Europe offset weakness in its UK and Ireland markets.

SIG has been seeking to strengthen its balance sheet by selling assets and reviewing costs as it battles to recover from weak trading in its UK insulation, interiors and offsite construction businesses.

Chief Executive Officer Meinie Oldersma took over in April to lead the turnaround, which resulted in SIG exiting 11 businesses. (Reporting By Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri)

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