Mid-tier, not regulators, should address audit choice

Grant Thornton

Mid-tier firms need to do more themselves to persuade large listed clients they are a viable auditor, but ‘invisible barriers’ still need to be lifted to open up the market, Grant Thornton partner Steve Maslin told today’s Financial Director Summit in Hampshire.

‘There are smoke and mirrors and invisible barriers but how do we clear some of those barriers away?’ Maslin asked. ‘This is a long game and it’s partly down to us. We know we have to do something ourselves.’

He saw a role for regulators ‘to clear away some of the disinfomation’, citing the example of banking covenants that stipulate companies must use a Big Four auditor. These were often drawn up as ‘boiler plate’ agreements by lawyers with little client input.

But he added: ‘We don’t believe anyone should do us a favour by imposing an artificial business model.’

Speaking on the same panel, PricewaterhouseCoopers vice-chairman Glyn Barker described Financial Reporting Council chief executive Paul Boyle’s comments earlier this year that the merger that created the firm should never have been allowed as ‘drivel’.

And he dismissed the assessment on which it was based – the Oxera report into competition and choice in the audit market – as ‘flaky’.