PracticeAuditOpinion: Issue of audit independence.

Opinion: Issue of audit independence.

Only months after the first major UK consolidator was born, 'the Tenon model' is already a common phrase.

The firm – rather company – already has imitators, not least in Numerica, the Levy Gee offshoot hungrily eyeing its former competitors. Numerica has also announced its intention to spin off its audit arm into an arm’s length associate – again a la Tenon.

But this raises the same troubling concerns. Rules preventing listed companies acting as auditors exist to prevent shareholders exerting influence over auditor objectivity. Even if existing rules are not being breached, is it ethical for the arm of a listed company to carry out audits?

The ICAEW has already pledged to keep a close eye on the audit independence issues surrounding Tenon’s audit arm, Blueprint.

It will now need to do so at AV Audit, Numerica’s ‘Blueprint’ and wherever else a similar practice is employed. When it comes to audit independence perception matters more than reality. Accountancy does not need another SEC-style battle.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

5d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

1w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

2m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter