French CFO attacks joint audit
Joint audit system is no longer fit for purpose now that complex IFRS have become mandatory says French CFO
The chief financial of officer of one of France’s largest companies has said
the joint audit system is no longer fit for purpose now that complex
International Financial Reporting Standards have become mandatory.
Thibault de Tersant, CFO of
Dassault Systèmes, said:
‘Accounting standards have become more complex and each firm has its own
interpretation. It has become very difficult to reconcile the interpretations of
two firms.’
The comments on the system, which is mandatory in France, will be seen as a
setback for campaigners in the UK who have pushed for joint audit as a mechanism
for creating more competition and choice at the top end of the UK audit market.
The criticisms of the complexity of audit standards making joint audit
impossible may also add pressure to standards-setters.
Mazars partner David Herbinet has pushed aggressively for regulators to look
at joint audit as a way of creating more choice in the market, while outgoing
Hundred Group of Finance Directors chairman Philip Broadley has also said that
joint audit could open up the FTSE 350 audit market. But the proposals have not
met with warm comments from the Big Four, who say joint auditing is a recipe for
disaster, pointing to the fact that Parmalat was joint audited.
De Tersant also expressed concern about the fruits of the convergence project
between the US GAAP and IFRS: ‘I would welcome a single set of accounting
standards, but I am not optimistic about convergence. We could end up with the
IFRS that is used in Europe and IFRS that would have to conform with the SEC’s
version,’ he said.
The Dassault Systèmes CFO’s concerns follow fears from US officials that the
convergence project is being rushed. FASB head Bob Herz has warned that rushing
convergence will create a dual accounting system, while former SEC accountant
Lynn Turner said the US needed to develop a better understanding of IFRS.