GE’s audit committee has initiated a tender process to consider replacing KPMG as its external auditor.
The audit committee determined KPMG will serve as the company’s auditor for 2019, and the effective date of any audit appointment after that will be based on “the progress toward completing the company’s previously announced portfolio actions,” GE said in a statement.
Roughly 35 percent of GE shareholders voted in April against KPMG as the independent audit firm, after major proxy advisory firms urged shareholders to withhold support for the auditor.
The tender process “is responsive to our shareowners and balances the competing considerations about undertaking an audit firm rotation amidst the portfolio and other strategic actions that the Company is currently executing,” said Geoff Beattie, chairman of GE’s audit committee, in a statement.
GE said its audit committee will provide further details about its deliberations and its planned response to the shareholder vote in the company’s March 2019 proxy statement. KPMG has served as GE’s auditor since 1909, according to the firm’s 2017 audit report.
A KPMG spokesman said the firm respects the tender process. “We’ve been privileged to work with GE for many years and are proud of our work and our teams,” he said. “It is good governance and a responsible activity for strong audit committees to review and assess their external auditor relationships. We welcome the future opportunity to work with all the stakeholders to demonstrate the value KPMG can continue to deliver.”
GE revealed in early 2018 that the Securities and Exchange Commission was investigating the company’s accounting practices after a $6.2 billion charge in late 2017 stemming from its GE Capital insurance portfolio. The company more recently announced a $22 billion goodwill impairment and an expansion of the SEC investigation as a result.