July 19, 2019
Published: International Accounting Bulletin
Marking the launch of the eight-week consultation period for the Competition & Markets Authority (CMA) proposals on statutory audit, Mazars says it supports the Department for Business, Energy & Industrial Strategy’s conclusion that the CMA had produced ‘a thorough and effective range of measures to create a genuinely competitive audit market’.
Mazars Senior Partner Phil Verity said: “The time to deliver a competitive and resilient audit market is now, and we must be brave as an industry to embrace the radical reform which is necessary.
“The CMA’s recommendations; the result of a comprehensive investigation which sought evidence from a diverse range of stakeholders, both within and outside the industry; are one single package. Dilution and omission of those measures which are unfamiliar or challenging will irrevocably undermine the chance for real change. We strongly believe that the CMA’s proposals, including mandatory joint audit across most of the FTSE350, should be implemented as cohesive reform package as a matter of priority.
“In seeking to reduce the unsustainable concentration in the listed audit market and increasing resilience across the sector by enabling a greater number of firms to participate, no measure is proven to be as effective as Joint Audit. Its implementation in France, a fellow G7 economy, has led to a diverse and vibrant audit market, open to a range of participants and creating genuine choice for clients.
“We are concerned that Shared Audit has been presented as a ‘Joint Audit-lite’ compromise when, as a system, it has significant weaknesses which can present genuine risks to quality while categorically failing to address the central issue of resilience. A detailed review of the evidence, such as that performed by the CMA, leads to the conclusion that Joint Audit represents our strongest opportunity for meaningful change and we fully support the implementation of the CMA’s recommendations in their entirety.”