Lowland Investment Company Selects Johnston Carmichael LLP as New External Auditor Following Competitive Tender

Completion of Audit Tender Process and Selection of Johnston Carmichael LLP

On 24 July 2026, Lowland Investment Company PLC announced the conclusion of its formal and competitive audit tender process, resulting in the selection of Johnston Carmichael LLP as its external auditor. The Audit and Risk Committee conducted a detailed assessment of all bidding firms and recommended Johnston Carmichael LLP, a recommendation subsequently endorsed by the Board. This marks a significant governance milestone for the investment company.

The tender process is a critical component of the company’s corporate governance framework, ensuring external auditor appointments undergo rigorous competitive scrutiny. The Audit and Risk Committee’s involvement in evaluating candidates and formally recommending an auditor to the Board aligns with best practices within the investment trust sector. This competitive approach aims to assure shareholders that the chosen auditor can deliver high-quality audit services and uphold robust financial reporting standards.

Ernst & Young LLP to Maintain Audit Role Until Transition

Ernst & Young LLP, Lowland Investment Company PLC’s external auditor since 2016, will continue in its role through the financial year ending 30 September 2026. This arrangement guarantees completion of the 2026 audit before Johnston Carmichael LLP assumes responsibility for subsequent periods. The phased transition ensures audit continuity and facilitates an orderly handover between the outgoing and incoming auditors.

The extended tenure of Ernst & Young LLP prior to the handover follows standard auditor transition practices, allowing completion of current audits and preventing any gaps in audit coverage. Ernst & Young LLP’s decade-long familiarity with the company’s operations and financial reporting systems supports a seamless conclusion of the 2026 audit.

Shareholder Approval to Be Sought at 2027 AGM

The appointment of Johnston Carmichael LLP is subject to shareholder approval, with a resolution scheduled for the 2027 Annual General Meeting. This process ensures shareholders have the opportunity to review and endorse the Audit and Risk Committee’s recommendation before the new auditor formally takes office. The shareholder vote represents a vital governance checkpoint in the auditor appointment process.

Presenting the appointment to shareholders aligns with corporate governance standards and investment trust shareholder expectations, enabling them to exercise stewardship and inquire about the evaluation process if desired. While the announcement does not detail specific evaluation criteria, the formal recommendation and Board endorsement indicate Johnston Carmichael LLP demonstrated clear competence and suitability.

Governance Structure and Audit Oversight at Lowland Investment Company PLC

Managed by Janus Henderson Fund Management UK Limited, Lowland Investment Company PLC operates under a governance framework that includes an Audit and Risk Committee responsible for audit oversight and recommending external auditor appointments. The company’s legal entity identifier is 2138008RHG5363FEHV19. The recent competitive tender process exemplifies the company’s formal procedures for auditor evaluation and selection.

The Audit and Risk Committee’s role in the tender process underscores the company’s commitment to robust financial reporting oversight and audit quality. As a listed investment company, Lowland Investment Company adheres to stringent corporate governance requirements, and the Board’s endorsement of the Committee’s recommendation provides further assurance of thorough scrutiny.

Johnston Carmichael LLP to Begin Investment Trust Audit Engagement

Subject to shareholder approval at the 2027 AGM, Johnston Carmichael LLP will become Lowland Investment Company PLC’s external auditor starting with the year ending 30 September 2027. Their selection through a competitive process suggests the firm demonstrated distinct strengths compared to other evaluated candidates, although specific evaluation details and competing firms were not disclosed.

The incoming auditor will need to familiarize itself with the company’s operations, investment portfolio, financial reporting, and internal controls. The transition, with Ernst & Young LLP completing the 2026 audit, allows for knowledge transfer to support a smooth handover. This change marks a significant development following Ernst & Young LLP’s continuous engagement since 2016, but the competitive tender process assures a well-considered decision.

Implications for Financial Reporting and Audit Procedures

Lowland Investment Company PLC will implement transition procedures to ensure uninterrupted audit and financial reporting processes during the auditor changeover. Coordination between the company’s finance team and Johnston Carmichael LLP in late 2026 and early 2027 will facilitate the handover of audit responsibilities and access to necessary documentation. Such coordination is standard and typically does not disrupt reporting timelines.

Investment company audits involve specific considerations including investment valuation, transaction verification, and income recognition testing. Johnston Carmichael LLP will review the company’s accounting policies and financial statements accuracy in these areas. Generally, auditor transitions do not alter accounting policies unless deficiencies are identified, which is uncommon in routine changes.

Regulatory Compliance and Governance in Auditor Selection

The competitive tender process complies with UK regulatory and governance standards applicable to listed investment companies. The Financial Conduct Authority (FCA) and UK Corporate Governance Code require auditor independence, thorough evaluation, and audit committee involvement in auditor appointments. The Audit and Risk Committee’s oversight and Board endorsement exemplify adherence to these governance controls.

Although the announcement mentions a "detailed evaluation" of bidders, it does not disclose evaluation criteria, timeline, or the number of participating firms. The 2027 AGM shareholder vote will provide transparency and allow shareholders to scrutinize the appointment, reinforcing accountability and confidence in the company’s audit and financial reporting.

Investor Guidance and Monitoring for Shareholders

Investors should monitor updates on the auditor transition, including disclosures in the 2026 Annual Report about Ernst & Young LLP’s handover to Johnston Carmichael LLP. The 2027 AGM will offer shareholders the opportunity to approve the new auditor and review any additional information on the rationale and selection process. Auditor changes are generally routine governance matters, but shareholders may seek clarity on evaluation procedures and Johnston Carmichael LLP’s qualifications.

There is no clear immediate impact on the share price from this announcement. Auditor changes typically do not affect market valuations unless accompanied by concerns over financial reporting or internal controls, none of which are indicated here. The orderly transition planned suggests a routine governance update. Investors are encouraged to request further details from the company if needed.