Grant Thornton UK CEO David Dunckley said Grant Thornton could start tendering for FTSE 350 clients again if joint audits are introduced to that market.
Last year, Grant Thornton said that it would stop tendering for FTSE 350 clients due to the amount of time and investment it cost the firm to pitch to a potential client when, more often than not, FTSE 350 companies choose one of the Big Four to be their auditor.
Dunckley told the Business, Energy and Industrial Strategy (BEIS) Committee in an evidence session for its inquiry into the future of audit inquiry that if joint audits were mandated it would help remove some of the ‘bias’ of FTSE 350 companies towards the Big Four.
He added that it would take three or four years before Grant Thornton would be able to have the capabilities to take part in a joint audit model.
The introduction of joint audits for FTSE 350 clients is one of the proposals that the Competition and Markets Authority has suggested for increasing competition in the UK audit market. It is also one of the proposals which has faced a lot of resistance both from accountancy firms and professional institutes.
BDO UK head of audit Scott Knight believes joint audits would lock in the current market structure. He noted that splitting the responsibilities between firms taking part in a joint audit would have to be carefully done. This he said is because if the Big Four were to take the senior position in the audit and the mid-tier takes the junior position, then the FTSE 350 audit market would still be dominated by the Big Four in the future.
He said that this would make it difficult for the mid-tier firms to breakout of the minority role and into the majority role, thereby not increasing the completion in the market.