THE PROPOSED OVERHAUL of rules governing company auditors have been watered down in a draft report published by European parliament’s legal affair committee.
The draft report published by British MEP Sajjad Karim, who is steering the reform through parliament, suggested ditching key elements of the European Commission’s radical plans to inject more competition into the market for large company audits.
The EC tabled proposals that would require companies to change their auditor every six years, and introduce caps on market share that would force the Big Four accountancy firms – PwC, Ernst & Young, KPMG and Deloitte – to split the provision of audit and non-audit services.
Karim’s report, published on the assembly’s website last week, said that auditor rotation should only have to take place every 25 years, while share caps should be scrapped entirely.
Karim is due to outline his proposals on 17/18 September.
The Competition Commission is due to reveal the findings of its own probe into the UK audit market in October.
PwC has been hit with a £2.3m fine by the accountancy watchdog over its audits of the financial statements of Cattles and Welcome Financial Services Limited
KPMG has retained its position as the listed company auditor, according to the latest Adviser Rankings.
While everyone values audit quality highly we must be be careful that we don’t let it deter talent. We need to guard against its commoditisation and the threat to a unitary profession
Commissioning and preparing an asset valuation for financial reporting should involve a three way dialogue between the client, valuer & auditor