Senior UK finance executives have called for
greater competition in the audit market in one of the final
sessions from the House of Lords economic affairs committee inquiry
into audit market concentration.
When members of the Lords committee expressed
concern over audit rotation, executives said they stay with the
same auditor because knowledge auditors have of their sector, the
international reach their auditor has and fear of losing valuable
insight if they change.
Firms among the FTSE 100 change their auditor,
on average, every 48 years, but some maintain they would like to
see another company compete with the Big Four firms.
Energy giant BG Group finance director Ashley
Almanza said the company would not like to see the market of Big
Three but would welcome the existence of a Big Five.“I don’t see
any one stopping mid-tier from consolidating and increasing
investment and becoming a big international network,” Almanza
added.
While executives support a new large market
player, they were on the whole dismissive of the suggestion to have
auditors appointed by an independent regulator as proposed in the
recent EC Green paper.
The executives said this would bring
additional risk to their business, claiming company boards should
appoint their auditors.
They also expressed general concern over
increased regulation in the audit market. One executive expressed
concern the market will have several regulatory regimes especially
as a result of the EC green paper. “I think more regulation would
be an issue. We also believe there should be more work done in
joining UK and European regulatory standards,” the executive
said.
The Lords inquiry into audit market
concentration is on-going and the committee is expected to give its
final opinion before the New Year.
Senior executives at this weeks session were:
BG Group finance director Ashley Almanza , Hundred Group chairman
Robin Freestone, Shell Finance Division EVP controller Martin ten
Brink and British Land finance director Graham Roberts.
