• Register
Return to: Home > News > Regulation > ICAEW calls on CMA for greater clarity on audit tendering requirements

ICAEW calls on CMA for greater clarity on audit tendering requirements

The UK Competition and Markets Authority's (CMA) draft order for audit market remedies lacks clarification of the competitive tendering requirements, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

ICAEW head of integrity & markets Tony Bromell said that the draft lacked clarity and logic for both businesses and audit firms.

"The CMA's more detailed explanatory notes to help clarify the competitive tendering requirements and in particular audit committee responsibilities are still too complex," he said. "Further clarification will be needed to help companies understand when they need to take action."

Bromell said a specific area the ICAEW hoped CMA would reconsider was when a UK company has to put ist audit contract out for tender.

"The CMA's guidance on the transitional arrangements suggests that companies that have changed auditors in the last 11 years will have to tender their audit contracts earlier than those who have not changed auditors that recently," Bromell said.

This is the result of the EU leaving some room for different interpretations, he explained. "But this interpretation is not logical and is the subject of much debate within Europe."

ICAEW comments came as a response to CMA's public consultation launched in July 2014 on the draft order The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of competitive Tender Processes and Audit Committee Responsibilities) Order 2014.

The draft order once finalised will put into force some of the changes proposed by the Competition Commission's investigation into the UK statutory audit market. These include10 year mandatory audit retendering for the FTSE350 companies.

The consultation will run until the end of until August 2014. CMA expects the order to apply for financial years beginning on or after 1 January 2015.

Related articles

UK competition authority launches consultation on draft order for audit market remedies
Mandatory retendering every 10 years hits UK FTSE350

Related links


Top Content

    MSI joins AGN and DFK in Global Connect

    A year after AGN International and DFK International launched Global Connect, multi-disciplinary association MSI has joined the group.

    read more

    Views from the Eurozone

    With Brexit looming, populist governments gaining footholds in a number of countries and movements such as the Yellow Jacket protests in France, 2018 was anything but a quite year for the eurozone. Here leaders report to the IAB on their markets.

    read more

    Eastern promise and how to find it

    With China rising as a global power, Jonathan Minter spoke with ShineWing’s Zhang Ke and Marco Carlei at the World Congress of Accountants 2018 in Sydney, to discuss the cultural challenges that occur when Chinese networks look beyond their border, and the dividends available for those who overcome them.

    read more

    The UK: uncertain waves rule Britannia

    The UK’s accountancy profession is currently in a period of much uncertainty. The Competition and Markets Authority (CMA) has released its review into the listed audit market which could cause the biggest shake-up the profession has seen in years, the Kingman Review has described the Financial Reporting Council (FRC) as not being fit for purpose and called for it to be replaced. All the while the country remains in a deadlock on Brexit negotiations.

    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.