TFS Gulf 
- Shell’s lead audit partner at EY had been involved long before his official start, triggering a rotation breach.
- The 2023 and 2024 audit opinions were legally non-independent, despite the numbers being correct.
- EY lost Shell’s $66M-a-year contract, four partners exited, and regulators opened probes, as first reported by the Financial Times.
Rotation clock nobody noticed
Gary Donald officially became Shell’s lead audit partner in 2021.
On paper, everything was compliant.
But internally, he had already been deeply involved with Shell for years in a senior global oil & gas leadership role inside EY.
Meaning the “rotation clock” didn’t start in 2021. It started earlier.
A whistleblower flagged it.
By signing the 2023 and 2024 accounts, Donald had legally exceeded his tenure limit. This broke the strict independence rules.
And in audit, independence isn’t just a metric. It’s a legal requirement.
Shell confirms the breach
Since Shell is listed on both the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE), EY reported the mishap to regulators in the US (SEC) and the UK (FRC).
And Shell confirmed the situation in a July 2, 2025, media release that the 2023 and 2024 audit opinions were “technically non-independent”.
What next? Shell brought in a new lead partner from EY to recheck the last two years of work.
The numbers were right. Absolutely accurate. But the signature? Legally invalid.
EY didn’t wait around and showed four partners the door:
- Gary Donald: The lead auditor
- Mark Woodward & Hee Yu Lee: Experienced oil and gas partners on the team.
- Alistair Denton: A compliance partner from the “National Office” whose sole job was to prevent rotation breaches.
Shell reopens the mandate, PwC wins
And then Shell’s Audit Committee decided to put the contract up for a “re-bid,” inviting both EY and PwC to compete for it.
PwC was announced as the winner on February 6, 2026.
The latter will officially take over in 2027 after the transition period wraps up.
Also read: EY in trouble for audit failure of NMC Health: Faces £2 Billion lawsuit
Why it’s a big blow for EY
To put this in perspective, Shell is one of the world’s biggest companies.
EY just lost a $66 million (₹550+ crore) per year contract. So a revenue and reputation loss.
To top it off, the UK regulator (FRC) has launched a probe into EY and could bear massive fines and serious reputational damage if found guilty.
Wrapping up…
India is entering a massive “Second Great Rotation” in 2026-27.
Most listed companies that appointed auditors in 2017 (after the Companies Act 2013 kicked in) are now hitting their 10-year hard stop.
With India’s National Financial Reporting Authority (NFRA) sharpening its teeth as one of the world’s most aggressive financial watchdogs, audit quality, compliance, and accountability are no longer optional.
FAQs:
Q: How does audit rotation work in the UK?
In the UK, Public Interest Entities (PIEs), along with banks and insurance companies, can onboard a statutory auditor for a total of 20 years. But when the clock hits 20 years in total, the company must fire the firm. That firm has to stay away for a 4-year “cooling-off” period.
Q: What are the audit partner rotation rules in the UK?
While the firm itself can stick around for up to 20 years, the Lead Audit Partner can only work on a client for 5 consecutive years. That’s it. After those 5 years, that partner has to “rotate off” and can’t touch that client’s audit for another 5 years.
