PracticeAuditEU probes audit competition

EU probes audit competition

The European Union is to follow the example set by the Financial Reporting Council and investigate competition in the audit market

The investigation was announced by the EU’s commissioner for internal markets
and services, Charlie McCreevy, during a speech on audit liability this week.

‘The aim is to explore how smaller audit networks or firms could be given
better access to the blue chip audit market – for the benefit of competition,
companies and investors,’ said McCreevy.

His spokesman Oliver Drewes said that questions around why there were so few
firms capable of auditing the largest corporations had become more prolific.

‘We need to research this to find out whether it is a question of liability
or skills,’ said Drewes. ‘The study will deal with a number of these issues and
will follow after the report on auditor liability is released, in the next few
months.’

Drewes denied that the UK study – jointly commissioned by the
Department of Trade and Industry and the
Financial Reporting Council – had triggered
the European investigation.

‘We were bound to do a study like this as well,’ Drewes said. ‘We will have
to advertise for this, and an independent panel will then decide who is most
suitable to do this study.’

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