In light of the implementation of the European audit reform, the Corporation of Auditors of the Council General of Economists (Corporación de Auditores del Consejo General de Economistas or REA+REGA), one of the two Spanish accountancy professional bodies, has called for the removal of anti-competitive clauses in audit tenders, which it said hinder the prospects of smaller auditors to win contracts.
Speaking at a REA+REGA conference of small audit firms last week Ana María Martínez-Pina, the president of Spain profession’s regulator, the Institute of Accountancy and Audit (Instituto de Contabilidad y Auditoría de Cuentas or ICAC) announced that legislative changes to implement the European audit reform in Spain are underway.
"This represents a great opportunity to reform the audit sector and promote market competition," the REA+REGA president Carlos Puig de Travy said.
At the conference held in the Southern city of Almería, the REA+REGA raised awareness about anti-competitive practices observed in audit tenders, such as requiring unreasonable high revenues to compete for audit contracts.
The REA+REGA offered the example of a state-owned local transport company, in which only audit firms with revenues of €25m ($32m) were able to compete for a three-year audit contract worth €75,000.
Another example in the public sector is that of Correos, the national postal services company, which required auditors to earn over €50m in revenues to bid for the contract.
Under these terms only the Big Four firms, with revenues ranging from €525m to €292m, could be able to compete in such tenders.Among the mid-tier, just six networks with revenues between €82.6 and €26.2m could participate: BDO, Grant Thornton International, AUREN, Mazars, Crowe Horwath International and Moore Stephens International.
"Such a discrimination of auditors based on revenues is unacceptable," the Council General of Economists president Valentín Pich said, who added that the professional body is scrutinising forthcoming tenders.