Opening up a fifth of the FTSE-250 audit market would only hit the revenues
of the Big Four by an average of £6m, according to
Welcoming the EC’s green paper on audit reform, which has made a raft of
radical measures including mandatory rotation of audits, the firm said opening
up the audit market would not hurt the Big Four.
Currently 4% of FTSE-250 audits are undertaken by firms outside the Big Four.
Opening that market would “kick-start” competition. The FTSE-250 audit market is
worth around £150m.
“The choice is whether to address the systemic problems that exist in the
market now rather than in the event of a failure at one of the large firms when
there would be just three firms but the same fundamental issues,” said Steve
Maslin, chair of Grant Thornton’s UK partnership oversight board.
“I do not believe there is any immediate threat to any of the largest four
firms. But if history teaches us anything, it is that the next financial crisis
will revolve around an unforeseen issue. The prudent approach is surely to
remove the barriers which prevent the increase of the number of auditors in the
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