Time to pipe up on audit choice

Time to pipe up on audit choice

One curiosity of the debate on audit choice has been investor interest – or, rather, the lack of it

To their credit, a couple of institutions take an active role in audit
debates – Morley and Hermes spring to mind.

Standard Life also responded to the consultation but, otherwise, responses
were coordinated through the ABI, the NAPF, the IMA and the London Investment
Banking Association.

That, you could say, covers a lot of the investment banking community. But it
seems bizarre that there isn’t more diversity of views and more responses.

What does Fidelity think of audit choice? What about UBS? And Barclays Global
Investors, or Gartmore, or Scottish Widows?

They are all big investment houses. All of them probably have governance
experts.

How are they making their views known?

Leaving aside the suggestion that the City prefers to do things behind closed
doors, the fact that so few replied poses an interesting question.

Just how concerned is the investment community about audits? Most investors
don’t offer very vocal criticisms. It lends weight to PwC’s argument that the
whole debate is misconceived, and that there is no problem.

The question also calls to mind the Sanctuary debacle earlier this year, when
big investors waved through the sacking of Baker Tilly. The firm’s auditing was
spot on but it had irritated management by qualifying the accounts.

Do investors really care about audits?

Arguments motivated by self-interest, from the big firms and the challenger
firms, currently dominate the audit debate. But if we’re to come to any
conclusions about what to do, then the ultimate users of accounts, the
investors, have to make their feelings plain.

Alex Hawkes is news editor of Accountancy Age

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