AQF calls for audit market shakeup

The Audit Quality Forum has called for more research into the amount of
competition in the audit market for large listed companies in the UK.

Responding to concerns by investors about the lack of choice in the UK audit
market, the AQF has today released a report called Shareholder Involvement:
Competition and Choice.

This calls for research into the perceptions of investors, brokers/advisors
and audit committees of competition and choice in the audit market; the need for
expanded global networks; the different types of audit firms; and why and how
changes of auditors occur.

The report highlights the need to maintain audit quality and identifies a
number of barriers to choice in the audit market.

Commenting on the report, Forum chairman and Ernst & Young partner Gerald
Russell, said that the DTI had agreed to follow up on the research, alongside
the FRC.

‘This issue has attracted a lot of interest and there are strongly-held
opinions as to what should or should not be done,’ he said.

‘Despite much innuendo, there is little real evidence relating to competition
behaviour in the audit market and I endorse the call for research into this
complex area, so that subsequent recommendations can be soundly based.

‘I am pleased that the DTI has agreed to take this research forward working
with the FRC.’