London, Feb 6 (Reuters) — Shell plc has selected PricewaterhouseCoopers (PwC) as its new external auditor, replacing Ernst & Young (EY) beginning with the financial year ending December 31, 2027, the company said on Friday following a competitive audit tender.
The decision follows regulatory and governance concerns surrounding EY’s audit of Shell’s 2024 financial statements. Britain’s Financial Reporting Council (FRC) launched a formal investigation in December into whether EY complied with audit partner rotation and independence rules — standards designed to ensure auditors remain sufficiently independent of the companies they audit.
Shell disclosed last year that EY had reported non-compliance with partner rotation rules under both UK and US standards, prompting the company to amend its 2023 and 2024 Form 20-F filings with the U.S. Securities and Exchange Commission (SEC). Despite the procedural issues, Shell’s audited financial statements for those years remained unchanged.
Under the planned transition, EY will continue as auditor through the end of the 2026 fiscal year, subject to shareholder approval at Shell’s 2026 annual general meeting. PwC will then take over the audit for 2027.
Shell’s audit and risk committee initiated a fresh tender process in late 2025, inviting EY and PwC to resubmit proposals based on factors including independence, team composition, and regulatory compliance. PwC’s bid was judged to better meet the committee’s criteria.
EY has said it remains focused on delivering a “high-quality audit” for the remainder of its term.
The change illustrates how auditor independence standards and regulator scrutiny can directly influence corporate governance decisions at some of the world’s largest companies. Shell is among the handful of UK public-interest entities subject to stringent rotation and tendering requirements, which seek to prevent overly familiar ties between companies and their auditors.
Reporting by John Donovan
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