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24 Oct 2011
MANDATORY AUDITOR ROTATION is supported by almost nine-in-ten (87%) finance executives, and the group is calling for a shorter rotation period than the European Commission's porposed nine years.
The survey by recruitment specialist Robert Half questioned 200 chief financial officers and finance directors.
Further reading
More than half (56%) plumped for a new auditor at least every four years, while 38% called for rotation on a three-yearly basis.
This flies in the face of feedback from the 100 Group, made up of FTSE-leader FDs, who said mandatory rotation and other proposals "show a fundamental misunderstanding" of the issues and are "deeply concerning".
The results indicated large and listed companies are most in favour of mandatory rotation every three years.
However, the majority of CFOs (70%) do not agree Big Four influence limits competition at the top of the market, with private sector firms less concerned about the issue than public sector CFOs.
Robert Half Management Resources director Ashley Whipman said: "While the majority of UK CFOs appear supportive of the European Commission's proposal for the frequent rotation of company auditors, they disagree that the Big Four auditing firms wield undue influence in terms of pricing."
It appears CFOs are happy to maintain the status quo Big Four of Deloitte, PwC, Ernst & Young, and KPMG, though they would like to see a far more regular rotation between these big players to ensure effective corporate governance."
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Better Question to ask
I'm curious to see how many of those CFO's have dealt with an auditor change and if their answer would change if they realized that those changes would also result in increased fees as well. That would represent a true reflection of how they will feel if these changes go through.
Posted by: DJ, 25 Oct 2011 | 12:45
EU hypocrisy??
The auditors for the EU have refused to sign off the bloc's financial accounts - for the 13th year in a row.
A report by the European Court of Auditors (ECA) criticises nearly every major area of the EU's expenditure.
In response to the report, the Vice-President of the European Commission, Siim Kallas, says he's "glad to see the Court now gives its green light to over 40% of total payments".
[source BBC News]
Strange that such a proposal is being made by the very organisation to which the above applies.......surely if the EU Commission wanted to change their auditors they could do so without trying to force such changes across the entire EU!!
Posted by: Graham Hepworth, 25 Oct 2011 | 19:10