UBS Group has reportedly decided to retain EY as its external auditor and expand its role to include auditing Credit Suisse’s accounts starting in 2024, according to sources cited by the Financial Times. The scale of the contract will require EY, one of the Big Four accounting firms, to deploy staff from other countries to work on the audit. PricewaterhouseCoopers (PwC), who has served as Credit Suisse’s auditor since 2020, will retain its role in auditing the accounts of the acquired bank for the year 2023. UBS’s acquisition of Credit Suisse was prompted by customer withdrawals following the troubled lender’s financial difficulties.
In Credit Suisse’s 2022 annual report, PwC provided an “adverse opinion” on the effectiveness of the bank’s internal controls over its reporting. However, it stated that the bank’s financial statements “present fairly, in all material respects,” its financial position from 2020 through 2022. UBS and EY have not yet responded to requests for comment, while PwC declined to comment on the matter.
The decision to retain EY as the external auditor for UBS and expand its role to include auditing Credit Suisse’s accounts indicates the bank’s confidence in EY’s capabilities and expertise in financial auditing. As one of the Big Four accounting firms, EY has a global presence and the necessary resources to handle the substantial audit requirements of both UBS and Credit Suisse.
The enlarged contract size necessitates the involvement of EY’s staff from various countries to effectively conduct the audit. This demonstrates the complexity and scale of the audit process, considering the extensive operations and global reach of both UBS and Credit Suisse.
PwC’s role as Credit Suisse’s auditor since 2020 will continue for the bank’s accounts in 2023. PwC’s inclusion of an “adverse opinion” in Credit Suisse’s 2022 annual report regarding the effectiveness of the bank’s internal controls reflects potential areas of concern and the need for improvement. However, PwC confirmed that the financial statements fairly represented the bank’s financial position during the specified period.
UBS’s decision to acquire Credit Suisse for 3 billion Swiss francs in response to customer withdrawals highlights the challenging circumstances faced by the troubled lender. The acquisition aimed to stabilize Credit Suisse and address concerns regarding its financial stability, providing a potential path to recovery.
The selection of EY as the external auditor for both UBS and Credit Suisse underscores the importance of independent auditing in the banking sector. External auditors play a vital role in assessing the accuracy and reliability of financial statements, providing assurance to stakeholders and maintaining the integrity of the financial system.
While UBS and EY have not yet commented on the reported decision, and PwC has declined to provide any further information, the choice of auditors is a significant decision for banks. The continuity of auditors, coupled with their expertise and international presence, enables them to provide consistent and comprehensive auditing services.
The retention of EY as the external auditor for UBS, along with the expanded role of auditing Credit Suisse’s accounts, signifies UBS’s confidence in EY’s ability to perform thorough and reliable audits. As UBS and Credit Suisse navigate the complexities of the banking industry, the involvement of experienced auditors is crucial in ensuring transparency, compliance, and the trust of stakeholders.
The decision by UBS Group to retain EY as its external auditor and expand its responsibilities to include auditing Credit Suisse’s accounts reflects the bank’s commitment to rigorous financial oversight. With the involvement of a reputable accounting firm, UBS aims to enhance transparency, reinforce financial controls, and maintain the confidence of stakeholders.