• Register
Return to: Home > News > Grant Thornton UK: FTSE 350 auditor appointment should follow public sector model

Grant Thornton UK: FTSE 350 auditor appointment should follow public sector model

Grant Thornton UK has proposed that auditors for FTSE 350 companies should be appointed by an independent body.

The firm’s head of assurance Jon Roberts told the International Accounting Bulletin that  the independent body should follow the ‘tried and tested’ approach used by the UK’s Public Sector Audit Appointments (PSAA)”.

Roberts said if a firm is independently selected as an auditor it can be “100% comfortable with the independence of that procurement and can act completely independently as it has that underwritten from the start in terms of the relationship with that body.

“But also the body has the advantage of being able to say 'well, we did not choose our own auditors either, we accepted the independent appointment' so the body actually gets credit for its commitment to independence.”

Roberts acknowledged that there would be complexities with establishing such a board, due to the FTSE 350 being a ‘broad church’ of different companies. He noted that this approach may not be a suitable model for all the FTSE 350 companies.

Grant Thornton’s proposal follows meetings which have been held in the UK by the Institute of Chartered Accountants in England and Wales (ICAEW), the Big Four and some of the other large firms, in attempt to resolve some of the issues surrounding the lack of competition.

An audit cap

Another suggestion to have come from the meetings has been to introduce an audit cap on the amount of FTSE 350 clients the Big Four are allowed to audit. While Roberts believes that Grant Thornton’s proposal is the best option, he said there is no reason that these proposals for reform should be mutually exclusive.

Roberts said that introducing an independent body to select the auditors of large companies could lead to a market that has a cap on clients within it, or a way of operating a joint audit selection process.

He noted that the independent body should consist of investors and other key stakeholders and should avoid the ‘alumni effect’, in reference to the criticism that other regulatory bodies have faced due to being too close to those who they are supposed to regulate.

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.