PracticeAuditDeloitte chief appeals to David Cameron on audit reform

Deloitte chief appeals to David Cameron on audit reform

John Connolly calls on Prime Minister to help protect auditors from "ill advised" reforms

PRIME MINISTER David Cameron has been urged to protect UK auditors from “ill-advised” European reforms which could damage the UK’s competitiveness as a global centre of finance.

John Connolly (pictured below), senior partner at Big Four firm Deloitte, sent a personal plea to the prime minister asking him to “lead the debate” in the face of audit reforms canvassed in a European green paper.

John Connolly senior partner at Deloitte “Many of the Green Paper’s ideas are potentially damaging to our shared growth agenda and will impose costs on UK businesses without any discernable benefit,” he said.

“Making such changes seems ill-advised at this stage of the economic cycle.”

The European Green Paper proposes a radical restructuring of the audit industry including a new regulator to appoint firms, mandatory rotation and caps on advisory fees. The commission has also proposed European-wide firm registration, and is considering forcing firms to hive off their audit arms, amid a raft of new proposals to shake up the industry.

Connolly fears the proposals may reduce the competitiveness and appeal of the UK and could lead to a downturn in listings.

“Some of the…topics raised in the green paper will impose disproportionate cost burdens on business and may even harm audit quality,” Connolly said in his letter.

In its own submission to the European Commission, the Government warned against increasing regulation which it feels may increase overall costs to businesses.

“The Government is inclined to be cautious about adding to the role of audit or its regulation in relation to published accounts enhancements which have the potential to increase costs to the economy,” the submission said.

European Commissioner Michel Barnier has made it clear he will accept nothing less than structural change for the industry.

“The status quo is not an option,” he said in October.

“If you…want to start with business as usual, please don’t rely on me to take that tact.”

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
PwC to take over from Deloitte as Diploma auditor

Accounting Firms PwC to take over from Deloitte as Diploma auditor

3m Alia Shoaib, Reporter
Deloitte rises in auditor rankings with most FTSE 250 clients

Accounting Firms Deloitte rises in auditor rankings with most FTSE 250 clients

3m Alia Shoaib, Reporter
Latest Big Four auditor changes

Audit Latest Big Four auditor changes

4m Alia Shoaib, Reporter
FRC closes investigation into PwC over Tesco accounts

Accounting Firms FRC closes investigation into PwC over Tesco accounts

6m Alia Shoaib, Reporter
Deloitte set for brickbuilder Ibstock audit

Accounting Firms Deloitte set for brickbuilder Ibstock audit

12m Stephanie Wix, Writer
The future of the audit industry: From masses of data, to meaning

Audit The future of the audit industry: From masses of data, to meaning

12m Acccountancy Age
Deloitte scoops GSK 'mega audit' from PwC

Audit Deloitte scoops GSK 'mega audit' from PwC

12m Kevin Reed, Writer