Prior to 2011, the average tenure of a FTSE100 audit firm was 49 years, with the majority of firms never having changed auditors in living memory, some being retained for over a century.
The Competition & Markets Authority’s perception was that the costs of audit were not reflective of the competitive landscape, nor were FTSE businesses realising true value or quality of service from their auditor. As such, publicly listed companies are now being forced to review their audit service provider.
...if companies have not reviewed their audit provider in nearly 50 years, how do they expect to drive the most value from an audit tender process – let alone choose the right audit firm for their business?
Guy Strafford, Chief Client Officer, offers an overview of Proxima's custom audit tender services
Richard James, Category Director - Professional and Financial Services, offers an overview of Proxima's best practice audit tender services
The process of tendering statutory audit is often managed by the chair of the audit committee and the group CFO. It’s rare that these individuals manage a traditional tender process. Additionally, the nature of these direct, long standing relationships can often reduce the objectivity around the decision making process.
To complicate matters further, in-house procurement teams are unexposed to the audit market and struggle to understand the nature of the relationships and decision-making criteria required. There is no “industry standard” approach and with such a low volume of activity to treat as a precedent, your in-house team will be learning as they go.
With a best-practice, proven approach to reviewing and tendering audit services, Proxima acts as a central interface between your executive board, audit committee and audit firm.
Our custom audit tender service simplifies a potentially lengthy, complex process and offers an independent view of the audit market.
...the audit committee an opportunity to test the independence and objectivity of the audit relationship.
...the finance team an opportunity to challenge participating audit firms on their ability to think differently about the services they are offering. At the same time, gleaning new ideas from the different experiences each of the audit firms are bringing to the discussion.
...the company an opportunity to receive more value from audit services – increased efficiency, cost improvements – and the opportunity to approach the audit itself differently.
“Following a transformational acquisition, we had a unique opportunity to evaluate our external auditors and ensure we were receiving an effective and high quality audit service. During the tender process, Proxima provided procurement expertise and assistance which helped to drive real benefits to our business.”
Finance Director Operations, FTSE 250 company
“Proxima helped us to focus on the key cultural, quality and service factors involved in our decision-making process, that ultimately led to the selection of the right audit provider for us. As a result we will see significant added value from our audit provider, without incurring additional fees.”
Chief Financial Officer, FTSE 100 company
Download our best practices guide offering 5 key recommendations for maximising your audit tender process.
Buying statutory audit is not like buying stationery, engineered products or cleaning services. There isn’t a fixed specification of requirements, and outputs may vary depending on the construct of your business. Finding the right partner is often more important than getting the best price.
Use the form to the left to download our best practices guide.