Jessica Fino 7 Jan 2019 02:20pm

Top UK finance directors baulk at joint audits

The Competition and Markets Authority (CMA) is facing criticism from the 100 Group over its proposal to introduce joint audits

As part of its market study released last month, the CMA proposed that audits of the FTSE 350 should be carried out by at least two firms, one of which from outside the Big Four.

The 100 Group, which represents the financial directors of the biggest UK-listed companies, is “dismayed” by the proposal, according to a report from Sky News. The leading FDs believe it would increase audit costs without any assurance that it would improve their quality.

In its initial submission, before the CMA published its findings, the 100 Group, said, “They are more expensive and time-consuming with decisions relating to key accounting matters often taking longer to get agreement from the auditors. We understand that, despite a number of French companies appointing one Big Four firm and one smaller firm in a joint model, it is not clear that this has enabled the smaller firm to take on the larger audits themselves.”

Deloitte, Grant Thornton and Mazars have argued in favour of joint audits, but EY, PwC, BDO have raised concerns about their effectiveness.

The deadline for feedback on CMA’s proposals is 21 January 2019.

A spokesperson for the 100 Group said it “will shortly be discussing our position on the CMA proposals and, if we choose to, will respond directly to the CMA with our comments.”