Mid-tier rejects funding offer

Mid-tier audit firms have said they do not need outside funding to take on
the Big Four.

The European Commission last week published a report calling for a relaxation
of ownership rules to create the prospect of private equity-backed audit firms
or other sources of capital coming in to enliven the market.

But mid-tier figures said investment was not the problem. ‘So far we have not
been constrained by funding. We have good access to partner capital and
traditional lines of financing. Funding is not the silver bullet answer,’ said
Steve Maslin, head of external professional affairs at Grant Thornton.

Jeremy Newman, managing partner of BDO Stoy Hayward, added: ‘I don’t think
this report will have the impact that the EU would have hoped it will. I feel
that taking on outside investment and adopting a corporate structure would not
outweigh the benefits of the partnership model.’

The prospect of outside investment is not just intended to break the hold of
the Big Four. The move could also help to recapitalise Big Four firms if
catastrophe struck, some have suggested.

But the lukewarm response may worry regulators, who are keen to find policies
to help unlock the market.