Opinion - Don't fudge on audit.
Tenon’s rise has been spectacular. The first ever listed accountancy services company has bought up so many practices that it is now of a size equivalent to a top-end mid-tier firm.
It should be applauded. It’s a good idea and has given many small firms a way of dealing with services offering and succession issues.
But the ICAEW is right to keep a close eye on audit independence issues surrounding Tenon’s audit arm, which has been given the name Blueprint.
This, Tenon tells us, is a separate and independent organisation owned by former audit partners of the firms it has purchased.
But the institute has raised concerns over discussions about changing Blueprint’s name to something more Tenon-like. Its concern is that this alteration might not give Blueprint the appearance of independence.
This is an important point. Yet the reality of audit objectivity and independence is even more important. Tenon and the institute have presumably come to some sort of agreement over Blueprint’s independence. One would assume this agreement deals with issues such as Blueprint audit partners using the same offices and facilities as their Tenon colleagues. One would also assume the institute has considered any risk that Tenon partners may influence their auditor colleagues sitting along the corridor.
The nub of the issue is that rules against listed companies acting as auditors exist to prevent shareholders exerting any influence over auditor objectivity. For the sake of the future of audit, and to keep up what public faith there is in the process, this principle must not be fudged.