Origin Energy Has a New Auditor

Have your or your business ever wondered just what exactly was going on with your books? Origin Energy was thinking just that! However for years they were with KPMG, but recently they’ve decided to go in a different direction. Keeping on top of your books is essential when running any business, whether it’s a small or large enterprise, so taking a few cues from the big players might not be a horrible idea. That’s why today we’re going to take a quick look at why and how one of Australia’s biggest energy providers made the choice to change which auditor it uses for its accounts. We’re going to start off with a brief background, before diving into the meat and potatoes of this switch. Let’s go!

The Backstory

For many years Origin Energy was using the services of KPMG. KPMG is one of the ‘Big Four’ accounting services companies along with Deloitte, Ernst & Young, and PricewaterhouseCoopers. KPMG is a very old company indeed, tracing its origins back over 200 years to a company founded by John Moxham in Bristol in 1818. It wasn’t called KPMG back then, however. It took a while but in 1976 a descendant of John Moxham’s company known as McLintock Main LaFrentz merged with two other companies to from the trans-national company KMG. A few years later a fourth company merged with KMG, resulting in the KPMG you know today. Origin Energy on the other hand is a true blue Aussie institution. With nearly 20 years in the Aussie energy game Origin had grown into one of the biggest energy outlets in the country.

The Arrival of the New Auditor

KPMG and Origin had a pretty good relationship for quite a few years. In fact Origin was paying KPMG over $4 million a year in order to take care of their accounting. That price tag might seem a little large, but given the scale of Origin’s enterprise they might have gotten their accounting for a steal. According to the AFR, over $2.4 million of this $4 million price tag was auditing services alone. Safe to say, Origin Energy required a lot of auditing. However whatever KPMG was doing, it was either too pricey or not comprehensive enough because Origin has embraced Ernst & Young, a fellow Big 4 accounting agency. Continuing the incestuous nature of these big companies, the current head of auditing for Origin Energy is a man named Bruce Morgan, a director of the company, who himself was once a partner with PricewaterhouseCooper, or PwC, which is also one of the Big 4 accounting agencies. It’s quite a small world we live in.

Who are Ernst & Young?

Ernst & Young, also known as Ernst and Young, are quite a popular company indeed. Think about your personal accountant. Maybe he has an office above a deli, or is just a simple online service that you can use. Ernst & Young are nothing like that. If your accountant  is like a roadside curry cart, Ernst & Young are a Gordan Ramsay restaurant. Basically they’re a massive transnational organisation that takes care of big accounts. That’s probably why Origin has decided to go with them. The company is based in London and has been there a long long time. Like a lot of modern conglomerates, this company is basically a million old companies stapled together. The oldest company in E&Y’s DNA can be dated back to the mid 1800s, which makes sense given that the company is still based out of London to this day. The company as we know it today is a result of a 1989 merger between Ernst & Whinney and the Arthur Young firm to create the Ernst and Young  you know and love today.

What does this mean for Origin?

Finding a great accountant can be a major hassle. They’re handling your money and that’s a really important thing. Many people have had issues with their accountant in the past, resulting in lawsuits and loss of income. However while you might have to make do with someone whose office is above a chicken shop, Origin Energy has the clout to switch from one gigantic international accounting firm to another. Best of luck to them!