The challenge
European Union (EU) audit legislation, adopted in 2014 that came fully into force in June 2016, requires that public interest entities (PIEs) in the EU change their statutory audit firm after a certain period of time. Listed on Euronext, global technology leader Barco, that develops networked visualisation solutions for the entertainment, enterprise and healthcare markets, is subject to this legislation.
To make sure it remained compliant for its 2018 accounts, it sought a new audit firm. To decide which service provider to work with, Barco, along with its audit committee, set out clear criteria of what it expected from its new auditor. PwC came out as the clear winner.
Taking an innovative approach
"Innovation’s been the lifeblood of Barco for over 85 years - Barco was founded in Poperinge in 1934 - and it remains key in what we do. It’s important to us that the service providers we work with share that outlook," explains Ann Desender, CFO, Barco.
"One of the reasons we opted for PwC was its whole digital approach to audit. Compared to the older way of auditing, where you selected a particular set of documents or transactions, new technologies allow you to more easily have a bigger data set to review. As a result, we not only get more insight, but knowing there’s greater coverage also gives more comfort," she explains. "Barco’s already digitised our internal audit process so we’re able to learn from each other, which is really valuable," she adds.
Assuring an international outlook
With more than 50 companies in 20 countries, an auditor with international reach was a "must-have" for Barco. "When looking for a new audit firm, being a global player was one of the first criteria we set. We need to be sure that our auditor’s present and has local audit teams at least in the countries where our biggest operations are situated," Ann Desender says.
She adds, "with local teams, we know we’ll have the necessary access to knowledge for specific criteria with respect to regulation, International Financial Reporting Standards (IFRS) and other local requirements relating to compliance."
"PwC first does its homework before coming with an opinion on whatever matter."
Delivering direct answers
The team's knowledge of standards like IFRS impressed Barco. "I particularly like the IFRS knowledge that PwC has throughout the team. If you have a specific question, they can answer it directly without having to always refer to an additional specialist," she enthuses.
Having two PwC Partners involved in the mandate also impressed the client and boosted the efficiency of the process. "Even when they’re not on site, if we have questions between periods, they’re easily accessible," Ann Desender notes.
Ramping up the relationship
The relationship with the PwC team is, to date - this is the first year of the audit mandate -, very good in Barco’s eyes.
"It’s a good relationship in the sense that there’s an easy understanding of each other. We’ve very tight and short deadlines with regards to how fast we report our figures externally, and we need them audited. So it’s important to have a proactive approach, to do as much as possible - especially related to judgment discussions - up front. PwC sees it the same way," Ann Desender says. And she goes on, "The team's also been very efficient in getting in touch with and getting to know the large number of contacts they needed to access the firm. It all worked very well."
Remaining consistent
Already, the teams have developed trust. "In areas of judgment, two parties don’t have to directly agree, but when you’ve done your homework and are able to align, you have to trust that the conclusion drawn will remain. PwC first does its homework before offering an opinion on a specific matter, and we know that the decision made will remain consistent, they won’t change their mind the next day," Ann Desender says.
Diving deeper
Given that 2018 was the first year of the mandate, Ann Desender notes, "PwC was really focused on its role as auditor and signing off that our financials are accurate, that the information we’ve provided is concrete and that we’re correct in relation to international standards. Going forward, I’m looking forward to the team being able to go even deeper into the story behind our financials and help us outperform them. It’s been too early for that yet," she concludes.
Contact us
Peter Opsomer
Partner, Deals - ESG and Delivering Deals Value, PwC Belgium
Tel: +32 475 55 16 70
