Newman hits back over audit concentration

Jeremy Newman hits back

Those who deny concentration is an issue for audit firms are trying to keep the debate ‘stuck in the past,’ BDO Stoy Hayward managing partner Jeremy Newman has claimed.

In an article for Accountancy Age, Newman takes issue with those who have criticised the firm for allegedly ‘misusing’ the research of the London School of Economics to make a point about audit quality.

The LSE’s research suggested concentration had led to higher fees, a point that BDO has been quick to publicise. ‘It is disappointing that some have chosen to dismiss these conclusions as merely BDO Stoy Hayward’s interpretation,’ he writes.

His comments are undoubtedly aimed at Richard Sexton of PricewaterhouseCoopers, who suggested BDO ‘misused’ the research.

Newman says it is widely agreed that concentration is an issue. ‘It is disappointing that some have not recognised this and want to keep the debate firmly stuck in the past. These same people continue to promote the myth that size is a proxy for quality to enable them to justify the status quo,’ he says.

PwC declined to comment on Newman’s remarks.