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An audit reform too far

18 February 2019

Radical, disruptive and expensive, is how the ICAEW has described the changes the competition watchdog wants to the audit profession.

It said that the introduction of joint mandatory audits would simply cause “significantly more disruption and cost” and was worried the results are very unpredictable.

Now the Big 4 firms are also pushing for a delay in the sweeping reforms.

They have written to the Commons business committee asking for a postponement until at least the completion of Donald Brydon’s separate review of whether the work of auditors is good enough.

Even mid-tier firm BDO has rejected the Competition and Markets Authority compulsory joint audits. It said: “We believe the joint audit model will take at least 10 years to set up and it will cement the view of business and the CMA that there is a division of skills between the Big 4 and challenger firms.”

Despite all this pressure some 72,000 people have contacted the CMA urging it to impose tough new rules regulating the industry. The response was initiated by 38 Degrees, an online petition site.

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