Fears that opening up the audit profession to outside investment will
compromise independence have been downplayed in an EU-commissioned study on
audit firm ownership.
In its report on audit firm ownership, research consultancy Oxera told the EU
that current ownership rules, blocking non-accountants from investing in audit
firms, raise the cost of capital for these firms by up to 10%.
Oxera found that opening the profession up to outward investment would reduce
this cost and could be managed in a way that prevented any conflicts of
‘A closer look at the decision-making processes within audit firms indicates
that alternative ownership and management structures, where the control of audit
firms is with external investors, are unlikely to significantly impair auditor
independence in practice,’ Oxera said in its report.
The findings of the study could pave the way for the EU to remove ownership
restrictions and open up the audit profession to billions of pounds of outside
Some senior figures, however, are sceptical about the impact that outside
finance will have on the profession.
Sir Mike Rake, the highly respected former chief executive of KPMG and now
chairman of BT, has said outside funding is not the panacea for concerns about
competition and choice in the audit market. Rake has argued that building
international networks and integrating practices is far more important and will
take 10 to 15 years to achieve.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process