The infrastructure of the audit market is no longer sustainable.
We are now just days away from the publication of new proposals aimed to change the manner in which the European audit sector operates. Commissioner Barnier has been presented with a unique opportunity to bring about a fundamental change to the dominance of the ‘big four’ accounting networks, who together share 90% of the market. http://www.ft.com/cms/s/0/bc952af8-1768-11e1-b20e-00144feabdc0.html?ftcamp=rss#axzz1ezeC9Rhv
I, and my fellow network leaders in Mazars, RSM, Grant Thornton and Rödl & Partner, as well as the EGIAN group, were seen throughout Europe’s media on Monday (28 November) urging M. Barnier to consider carefully the opportunity that is now in front of him. http://www.lesechos.fr/entreprises-secteurs/service-distribution/actu/0201761127515-auditeurs-et-consultants-attendent-la-publication-du-livre-vert-par-la-commission-europeenne-254859.php
He can diversify the competition that currently exists, and has a once-in-a-career chance to instigate a change to the audit market that will deliver a more sustainable and higher quality of audit for many years to come.
Of the many subject areas included in the proposals, it is the idea of the ‘joint audit’ that has presented us with the most vibrant conversations: they are a key part of the proposals and must remain the cornerstone of them.
Joint audits may indeed be perceived as a ‘controversial’ step - but it is incontrovertible that allowing firms outside the ‘big four’ to play a larger role within the market will lead to fairer and greater competition, in turn resulting in a more accountable and ultimately better audit process.
As I said in my last blog post on the matter Stand-tall-Commissioner-Barnier
, Commissioner Barnier must ‘stand tall’ and be brave enough to address the reform of the audit market and accept improvements and refinements to the draft proposals.
Right now, M. Barnier is facing a robust challenge to the proposed reforms from our larger competitors, and reportedly some of his colleagues in Brussels as well. They are concerned that the new proposals may lead to a decline in quality and an increase in cost. But as the press on Monday quoted me as saying, “The current infrastructure of the market is not acceptable”. This is a unique opportunity to reshape the profession – don’t let it go.