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.
