"We are pleased that the Competition Commission is proposing a package of measures to address the flawed structure of the larger company audit market. BDO LLP has long campaigned for change in the market and welcomes the Commission's proposed remedies."
The rejection of mandatory firm rotation will cause some surprise, but it’s BDO´s belief that the frequency of mandatory retendering which the Commission proposes is such that rotation would be a superfluous remedy.
The strengthening of accountability between auditors, Audit Committees and shareholders is also welcome. However, we are unlikely to see genuine liquidity in the market if the same small number of firms are invited to tender. There are more than four companies that deliver quality, large-scale audits. BDO intends actively to pursue opportunities that mandatory retendering opens up.
More clarity is still required on tendering practice. BDO would have welcomed proposals to facilitate a more transparent tender process, drawing on the best features of procurement practice.
The Commission has until September to finalise its report and BDO hopes that the proposed remedies are not diluted further between now and then. Such changes would help to create a market that is based primarily on innovation and audit quality, which can only be of benefit to UK plc.
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