ICAS PRESIDENT Sir David Tweedie has said that the Big Four must change the perception that their relationships with the FTSE 100 companies they audit are too cosy.
Speaking on BBC Radio 4’s In Business programme, Tweedie said that auditors need to get rid of the perception that winning business “is like playing golf” with their clients.
The comments come as auditors face investigations into market practices in the UK, Europe and the US.
Proposals tabled by European Commissioner Michel Barnier, which include mandatory auditor rotation, splitting the provision of audit and non-audit services and encouraging accounting firms to provide joint audits, received a mixed response from Tweedie.
Tweedie said that joint audits are a “nightmare” and there isn’t any support for them in terms of cost and efficiency, while they are likely to be more “inefficient” than current practice.
Tweedie’s assessment was disputed by James Roberts, senior audit partner at BDO.
“If we can’t fix that we ought to find something else to do for a living,” he said. “I don’t see any reason why [joint audits] should be more expensive or less efficient.”
However, Roberts and Tweedie were united in opposition to EC proposals to enforce mandatory rotation on the audit market. Roberts labelled mandatory rotation as “anti-competitive” while Tweedie favoured a “comply or explain” approach to mandatory tendering as recently put forwards by the Financial Reporting Council.
On the issue of preventing audit firms from providing non-audit services to the clients they audit, Tweedie said he was opposed to auditors getting huge consulting contracts with the same client.
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