But if anyone thought this idea was sensible, they need their heads examined.
The move would never address the dominance of the Big Four on major audits.
Spinning off the audit arms would merely mean that the Big Four audit arms
would dominate major audits, rather than the Big four firms.
Equally, if all you are is an audit arm, how do you grow your business? By
winning more audits. All this would do is encourage those entities to gain
market share, a perverse result.
In any case, it is hard to see how it would be possible to tell the Big Four
to disentangle audit from their activities, and not the rest of the industry. It
would be grossly unfair.
Telling the whole industry to either be auditors or tax advisers or
consultants would undermine the whole profession. Accountancy Age readers hardly
but the whole thing works through audit guaranteeing access to the FD, the
consequent understanding of the financials, and so on.
Tax and consulting advice might be more independent in such a set-up, but it
wouldn’t necessarily be better.
It’s difficult to know who might have had an interest in leaking such an
Someone who wanted to make the Market Participants’ Group look like it was
rejecting good and radical ideas? That has backfired.
The FRC’s reported conclusion that such a plan would have an unknown impact
on quality looks like a civil servants’ way of saying it was nonsense.
Thankfully the regulator has had the sense to drop it.
Alex Hawkes is the news editor of Accountancy Age
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