FRC welcomes OFT's fresh perspective
FRC chief said OFT better-placed than his organisation to deal with audit's competition issues
THE OFT’s INQUIRY into competition in the audit market will provide a “fresh perspective” on the issue, according to accountancy’s regulator.
Financial Reporting Council chief executive Stephen Haddrill (pictured) said that the OFT’s expertise and power made it well-placed to deal with opening up the audit marketplace.
“Having explored ideas for addressing these issues through our Market Participants’ Group, it has become clear to us that the competition authorities are better placed than audit regulators to tackle competition concerns,” said Haddrill.
He continued: “The OFT will bring both expertise and a fresh perspective to an area of real importance to the future success of our capital markets.”
ICAEW chief executive Michael Izza agreed with Haddrill, adding that the OFT should look at removing “any artificial restrictions that merely serve to reinforce the status quo”.
ACCA’s head of policy, Ian Welch, said that restrictive covenants that limit companies’ auditor choice must be removed, and a deal to limit auditor liability must be reached to open the market to entrants.
“The use of covenants is a directly anti-competitive measure, while easing the burden of potentially catastrophic litigation will encourage new entrants to enter the large audit market.”