Financial Times: Proxima weighs in on new audit market reforms
Nov 25, 2014 11:00:00 AM
There was a strong feeling of anticipation and suspense throughout the Proxima office in London on Wednesday, as we all waited excitedly for Financial Times City Correspondent Harriet Agnew’s article - discussing the shake-up to the audit tender process - to be published. A few weeks earlier, Richard James (Category Director for Professional and Financial Services) had been interviewed by Harriet, and asked to weigh in on what impact the changes to the UK audit tender process are having on the wider market.
The article, titled Accountants warn on audit market reforms, offers a succinct outline of the audit market reforms and the new mandate that now requires FTSE 350 companies to put their audit contracts up for tender at least every 10 years.
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. This presents an opportunity for forward thinking procurement leaders to align themselves with a highly topical, largely untouched area of business spend.
Earlier this year, Proxima analysed the use of audit services amongst the FTSE350. The research threw up a number of interesting stats and facts, some of which were used by the Financial Times to support the article. As a result of the research, Proxima has produced a free Best Practice Audit Tendering Guide, outlining 5 key recommendations for maximising your audit tender process.
I welcome your thoughts or comments on the topic of audit tendering – more specifically, how involved do you think procurement should be in the process of supporting the selection and appointment of a companies statutory audit?
If you have any thoughts or comments, please add them below.