(Accountancy Age) A root and branch overhaul of audit is required to bring assurance in financial statements, according to BDO.
The firm will argue to a Lords committee this afternoon that audits for small businesses and company subsidiaries should be scrapped, while regulators should encourage investors and non-executives to consider hiring auditors outside of the Big Four.
The Lords Economic Affairs Committee will hear the views of BDO, Grant Thornton, Mazars and RSM Tenon on audit market concentration.
BDO audit partner James Roberts pooh-poohed earlier reports that had suggested the firm would encourage government intervention to force auditor rotation. Instead, the firm would prefer investors and company non executives to be persuaded to consider auditor options outside the Big Four firms.
“We don’t like the idea of government-style [audit] appointments, but audit committees directed to consider other firms,” said Roberts.
“The oligopoly is unhelpful. We hear general rumblings [from investors]. We have to get over the institutional prejudice.”
Only the largest banks, financial services firms and oil giants were currently out of reach of BDO’s ability to audit among the UK’s top companies, said Roberts.
The UK’s imminent exit from the EU that may now put the audit committee to the ultimate test
Audit tendering has turned from good practice to legal practice under the EU audit reforms
Businesses will have to think more strategically about where they can source those non-audit services in the future
The FRC has raised concerns that the FTSE 350 audit market remains highly concentrated among the Big Four despite high levels of tendering and rotation