Flutter Entertainment, a global betting and gaming giant headquartered in Ireland, has decided to cancel its planned auditor transition from KPMG to Deloitte. The decision comes after the company completed its primary listing on the New York Stock Exchange (NYSE) in January 2024. Originally, the switch was prompted by EU auditor rotation rules, but Flutter has opted to retain KPMG, citing strategic and regulatory considerations related to its U.S. market focus.
Flutter Entertainment Scraps Auditor Switch, Keeps KPMG Amid U.S. Listing Transition
Background and Shift:
Under European Union regulations, listed companies are required to rotate their auditors within set timeframes to ensure independence and oversight integrity. Flutter, having worked with KPMG for over 20 years, was preparing to move to Deloitte in 2024. However, the U.S. does not mandate such rotation, giving Flutter the regulatory flexibility to maintain continuity with its long-standing audit partner.
With its U.S. listing now primary, Flutter has decided to leverage this regulatory environment to continue working with KPMG. The company believes this approach will help smooth its transition to U.S. financial reporting standards and minimize operational disruption.
Financial and Strategic Rationale:
In its annual report, Flutter emphasized that retaining KPMG ensures consistency in audit quality during a critical phase of adopting U.S. Generally Accepted Accounting Principles (GAAP). Notably, KPMG’s audit fee increased significantly in 2023 to approximately $22 million, reflecting one-off costs related to U.S. Sarbanes-Oxley compliance and the accounting framework transition.
Flutter also stated that any auditor switch at this time would introduce unnecessary complexity, particularly given the heightened scrutiny and controls expected of U.S.-listed firms.
Deloitte’s Role and Future Possibilities:
Although Deloitte will not take over Flutter’s audit responsibilities as planned, the firm may still engage with the company in a consulting capacity. Flutter’s audit committee noted that it will continue to review its audit arrangements regularly to ensure best practices and independence are upheld.
Conclusion:
Flutter Entertainment’s decision to maintain KPMG as its auditor underscores a strategic move to prioritize stability and compliance during its expansion in the U.S. market. By opting out of the planned auditor rotation, Flutter demonstrates a careful balancing act between international regulatory obligations and operational efficiency as it navigates its new role as a U.S.-listed company.
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