Auditors respond to Big Four clause investigation
Auditors have rushed to respond to the Big Four bank clause investigation, which could see the Office of Fair Trading come down hard on lending restrictions linked to audit.
RESTRICTIVE BANK clauses that force customers to use Big Four firms are to be investigated, and auditors have scrambled to respond.
Martyn Jones, senior audit partner at Deloitte, professed no shock at the announcement, saying his firm welcomes the removal of restrictive agreements.
“I believe in a level playing field”, he insisted, saying he had heard smaller auditors complain about the clauses, but had personally seen little evidence of them.
Ernst & Young underlined the fact it had already argued to the OECD – alongside the five largest UK auditors – for the removal of the stipulations.
But it warned smaller competitors could yet face barriers to auditing listed firms such as liability risks, client inertia and raising investment capital.
PwC’s head of policy Pauline Wallace heralded the investigation as “a great idea”, and welcomed the move towards a freer audit market.
She joined other Big Four audit experts in questioning how common the clauses are, saying the OFT must determine the size of the problem.
But Steve Maslin, chair of Grant Thornton’s Partnership Oversight Board, is unwavering about the existence of the clauses and the need to stamp them out.
He warned that they limit choice and mid-tier expansion, insisting “measures are needed to create a fully competitive audit market”.