European business leaders are largely opposed to the radical audit reforms proposed by the EC Green Paper, according to a PwC survey.
The PwC poll of 120 chief finance officers and audit committee chairmen at large European companies in France, Germany, Netherlands, Spain and the UK found the majority are concerned that broad mandatory measures would not improve audit quality, but raise costs and reduce market choice.
The majority of respondents are opposed to changing the law to make the use of two audit firms or joint auditors compulsory apart from in France, where using joint auditors is already law.
More than half (70%) of respondents are opposed to mandatory audit firm rotation while two-thirds are opposed to making it compulsory for firms to retender their audit after a set number of years.
There is however strong support (88%) for reforms such as increasing the dialogue between auditors and regulators. About half of all businesses support increasing disclosure of an auditor’s work, either through enhanced disclosure by the audit committee or an expansion of the audit report.
The poll found that businesses do not generally perceive an overall lack of competition in the audit market, with almost three-quarters agreeing competition problems were not a cause for concern when they last reviewed their audit provider, while 54% do not think there is a lack of competition in the audit market as a whole.
The majority of respondents (77%) also think the existing safeguards are sufficient when it comes to protecting auditors’ independence in the provision of non-audit services.