The heads of several midsized audit networks have issued a last-ditch appeal to the European Commission not to dilute sweeping proposals aimed at reducing the dominance of the four biggest accountants and improving audit quality.
Documents leaked in September showed Mr Barnier was determined to make big auditors share work with smaller rivals through “joint audits”, as well as splitting the audit and consulting arms of the biggest groups.
But Mr Barnier’s radical prescription for the industry triggered a revolt from his fellow European commissioners, who refused to clear the measures without significant changes. The likely compromise package will drop the mandatory joint audit provision and only stop groups from selling consultancy work to clients that they audit.
A rotation rule, requiring companies to change their auditor regularly, is likely to remain, with the time-period extended for companies that opt for joint audit. If agreement is reached, the plans will be unveiled on Friday.
The appeal to Mr Barnier was backed by Germany’s Rödl & Partner, Ed Nusbaum, chief executive of Grant Thornton International, Jean Stephens, chief executive of RSM International and Egian.
The Big Four maintain that they compete fiercely among themselves and are merely reaping the benefits of bolder and more lavish investment in their businesses.
Some have also questioned why there have not been more mergers between second-tier players. “Size is not everything in delivering services properly to very large clients”, argued Patrick de Cambourg, chief executive of Mazars.
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