Forum hit by investor resignation

The chairman of the working group charged with injecting more competition into the UK’s audit market resigned this week, amid concerns that the process to ensure competition among the Big Four firms is flawed, writes Paul Grant.

The resignation of Tim Bush will deal a blow to government efforts to solve the vexed question of auditor liability. It comes as DTI minister Gerry Sutcliffe told Accountancy Age this week that true competition among auditors is central to the British economy’s success.

Bush, a representative from investor group Hermes and former chair of the key Audit Quality Forum working party on competition, claimed the body was compromised by conflicts of interest and resigned his position. He told another Forum attendee that chairing a meeting on competition with members of the Big Four was ‘like being the monopolies and mergers commission with Sainsbury’s and Tesco on it’.

The move came as Sutcliffe, who took over as minister on the audit brief from Jacqui Smith following the general election, said: ‘Britain needs a competitive and high quality market

for audit services. That is why we are consulting on proportionate liability by contract and on other changes to the audit regime.’

The Association of British Insurers has also raised concerns over some of the issues voiced by Bush, who will continue on the working group.