(Corrects third paragraph to say fraud scandal, not tax
ZURICH May 22 Swiss power transmission and
industrial automation company ABB plans to switch
auditors to KPMG from Ernst & Young, it said on Monday.
"This decision was taken following a year-long comprehensive
external auditor tender process initiated in 2016 in line
with international good governance practices," ABB said in a
statement. "The proposal is subject to shareholder
approval at ABB's 2018 annual general meeting."
It follows a fraud scandal for ABB in South Korea, which
exposed a failure to maintain effective financial controls. EY,
ABB's sole external auditor since 2001, concluded ABB had not
maintained effective internal control over financial reporting.
However, an ABB spokesman said the situation in Korea did
not influence the company's decision to switch auditors, a
process which was launched beforehand.
The decision was down to corporate governance reasons, the
spokesman said, after EY had served as its auditor for more than
(Reporting by Joshua Franklin)