By Rob Starr, Content Manager, Big4.com
A clear majority (65%) of businesses across the EU believe there needs to be a more diverse audit market, and 51% support mandatory rotation of audit firms to address the risks of ‘over familiarity’ between the auditor and the audited company, while 21% do not according to Grant Thornton.
The survey was conducted by Experian in August and September 2012 as part of the Grant Thornton International Business Report, a quarterly global business survey of 3,000 public and private businesses of which 951 were from the EU. Other findings include:
A majority (54%) of EU businesses think it would help market confidence if every large public company was audited by two firms rather than one, with 40% disagreeing. Support was strongest in Greece (82% vs. 16%), Poland (82% vs. 16%), Spain (73% vs. 24%), France (72% vs. 21%), and Italy (66% vs. 18%). As well, support for a more diverse audit market was strongest in Greece (84% vs. 12%), Ireland (80% vs. 20%), Italy (80% vs. 6%), Poland (78% vs. 20%) France (77% vs. 9%) and the United Kingdom (74% vs. 25%). Globally, 69% support and 22% do not.
“We welcome any further research and discussions aimed at providing more feedback on the need for change in the structure of the EU audit market,” said Grant Thornton International CEO Edward Nusbaum. “EU businesses are saying that auditor concentration is an issue, but at the same time we need to point out that auditor rotation unto itself is not the answer, but only one possible part of the solution.”