INTERNAL markets commissoner Michel Barnier (pictured) left the audit profession in no doubt that reform was on the way when he spoke at a Brussels conference on the subject and said: “One can no longer say ‘Move on, there is nothing to see’ on audit issues.”
Speaking yesterday he added: “The status quo is not an option for the auditing world. It’s not about changing for the sake of change, but to reply to very real needs which we can no longer ignore.”
He said the financial crisis had damaged the image of audit and auditors, and indicated to the auditors, regulators and investors in the audience that the Commission would act to tackle concentration in the audit markets.
“The auditing market is hyper-concentrated. How can we encourage the emergence of new actors capable of being competitive? Some possibilities: putting in place ceilings to the total market share of the larger audit firms for listed companies; the idea of joint auditing where the audit could be done by two different audit firms, one of which at least is not part of the Big Four; and there is also the option of a “European passport”.
Barnier pointed out that some markets saw domination by the Big Four, while others were dominated by a Big Three or Two.
Barnier kicked off a consultation on audit reform in October last year. The project has received 700 responses or 10,000 pages of documentation.
The commissioner said he hoped to have some firm proposals ready by November this year.
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