Proxima offers further commentary around audit tendering debate
Jan 21, 2015 7:56:00 AM
Continuing our campaign to support FTSE companies tender their statutory audit, Proxima have again been asked by the Financial Times for commentary around the topic of mandatory audit rotation.
Following recent dialogue with the FT, our most recent commentary was published this weekend (premium FT members can access the piece here) – discussing the announcement of Sainsbury’s leaving PricewaterhouseCoopers (its incumbent of 20 years) in favour of Ernst & Young.
The recent coverage in the FT is our third in a series of articles that have been published with the media outlet following initial conversations with the FT’s City Correspondent.
Our most recent commentary was covered this time in FT’s Lex column, titled Auditors: Shopping Around. The piece highlights the changes that have been made to improve the competitive environment (and subsequently, quality of) the audit market since new regulations came into place last year. The journalist's findings supported our own experience on how the market is changing. One of the key data points discussed was the rarity of switching auditors amongst the FTSE 350. Since the new reforms, our research found that 46 of those companies switched last year alone – that’s more than in the decade to 2010. The new rules will require companies to tender their audit every 10 years and switch every 20. However, our recent best practices for audit tendering guide advises that these sweeping changes have both buyers and providers in a scramble as both sides figure out how to get their arms around the changes.
Proxima’s research analysed the use of audit services amongst the FTSE350, highlighting a number of interesting facts and statistics. While smaller accountancy firms such as BDO and Grant Thornton are yet to break into the business of auditing top companies on a large scale, they have been making progress in winning non-audit work, such as consulting; and it is clear they will enable them to have more chance of getting in front of the likes of Sainsbury’s in future tender processes.
Below is a round-up of all the coverage our research / expertise has influence around the topic:
- Financial Times: Accountants warn on audit market reforms
- Financial Times: BDO revenues rise above $7bn for first time
- Accounting Today: The virtues of mandatory audit rotation
- The Accountant: Audit needs a check-up
- Director of Finance: Audit needs a check-up
- accountingWEB: One in four FTSE 350 companies switch auditor
- Accounting Today: Audit rotation best practices
- Spend Matters: Buying audit services - advice from an expert
- Global Banking & Finance Review: Competition Commission reforms make audit a procurement challenge for FTSE350
- Procurement Leaders: Reforms shake up audit market
- Spend Matters: More top companies tendering audit services in response to new reforms
- Supply Management: Top companies changing auditor more often
If you would like to find out more about the research or would like to learn more about the impact of rotating your statutory audit provider, please do get in touch. Otherwise, feel free to add any comments or thoughts below.Guy Strafford