PracticeAudit87% of CFOs support mandatory auditor rotation

87% of CFOs support mandatory auditor rotation

Almost nine-in-ten CFOs favour mandatory audit rotation proposals from the European Commission

MANDATORY AUDITOR ROTATION is supported by almost nine-in-ten (87%) finance executives, and the group is calling for a shorter rotation period than the European Commission’s porposed nine years.

The survey by recruitment specialist Robert Half questioned 200 chief financial officers and finance directors.

More than half (56%) plumped for a new auditor at least every four years, while 38% called for rotation on a three-yearly basis.

This flies in the face of feedback from the 100 Group, made up of FTSE-leader FDs, who said mandatory rotation and other proposals “show a fundamental misunderstanding” of the issues and are “deeply concerning”.

The results indicated large and listed companies are most in favour of mandatory rotation every three years.

However, the majority of CFOs (70%) do not agree Big Four influence limits competition at the top of the market, with private sector firms less concerned about the issue than public sector CFOs.

Robert Half Management Resources director Ashley Whipman said: “While the majority of UK CFOs appear supportive of the European Commission’s proposal for the frequent rotation of company auditors, they disagree that the Big Four auditing firms wield undue influence in terms of pricing.”

It appears CFOs are happy to maintain the status quo Big Four of Deloitte, PwC, Ernst & Young, and KPMG, though they would like to see a far more regular rotation between these big players to ensure effective corporate governance.”

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