Finance directors of FTSE 100 companies are
opposed to EC proposals on mandatory joint audit and firm rotation,
according to a survey by the Hundred Group.

The group, which surveyed finance leaders of
the UK’s 100 largest companies, found no support for mandatory
audit rotation and joint audit, and less than 15% support for
mandatory retendering.

Hundred Group chairman Andy Halford said the
case for audit market reform is overstated and the proposals put
forward by the EC could concentrate the market further.

“The draft regulations on mandatory audit firm
rotation, audit tendering, the creation of audit only firms and a
widespread prohibition on non audit services will still have very
significant and profound implications for the way audits are
conducted. In particular, the revised proposals requiring mandatory
audit firm rotation after just six years represent a step backwards
from the previously announced position.

“Contrary to the statement issued by the
European Commission, these proposals will serve to concentrate the
market even further as the combination of shorter engagement
contracts, a cooling off period and prohibitions on non audit work
will preclude participation in the audit tendering process of any
firm providing non audit services, who are typically for our
membership, other Big Four firms.”

 

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