RSM International has expressed strong support
for reforming the audit profession in a recent letter to European
Commission (EC) president José Barroso and EC commissioner Michel
Barnier.
RSM International feels Barnier’s proposals
will ensure more competition in the industry if the extent of
external auditor concentration at the top of listed company markets
is reduced.
Barnier’s green paper has recommended
mandatory audit firm rotation for large public – interest entities
(PIEs), the separation of audit from non-audit services, joint
audits for the statutory audit and the strengthening of audit
companies.
Additionally, the draft proposed creating an
EU audit passport allowing cross-border audits, the prohibition of
Big Four contractual clauses, annual transparency reports for large
PIEs and the development of a European Quality Certificate.
The network said more action than the above is
actually needed suggesting this include reducing the market share
of dominant audit networks and regular, fair and transparent
tendering as well as joint audits to include non-Big Four
participants.
RSM International states a regulatory reform
programme should be growth-orientated without damaging smaller
private companies.
“It is our conviction that the audit
profession should also work together to bring leadership and
confidence to the financial markets so as to ensure the necessary
changes are brought in as professionally and smoothly as possible
for the benefit of all stakeholders,” RSM International chief
executive Jean Stephens said.
Related article
What’s inside the Barnier draft?
