Audit reforms could lead to less protection, say firms

Audit reforms could lead to less protection, say firms

Survey of Top 100 firms shows that 63% believe reforms such as auditor rotation will provide less protection for investors and the public

THE FRC’S AUDIT REFORMS could lead to higher costs, less scrutiny and reduced protection, according to a survey of accountancy firms.

As part of the proposed reforms, the FRC is calling for companies to put their audit out to tender every ten years to create greater transparency.

However, 63% of firms believe the change could lead to less protection for investors and the public, according to a survey of the Top 100 firms by accountancy IT provider CaseWare.

The survey, which was carried out in June, found although many accountants understood the FRC reforms hope to increase competition among firms, more than half felt the measure would lead to less thorough audits.

“Our survey particularly highlighted the worry that any new auditor would have considerably less experience and knowledge about the company it is auditing,” said Shez Hamill from CaseWare.

“In such cases, it could take several years to replicate the understanding that was in place prior to the rotation. This could well lead to investors and the public being less protected.”

Out of the 100 firms questioned, 30 responded to this particular question, with 19 showing they did not support auditor rotation.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource