Barclays backs 'Big Four' against audit shake-up
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Your support makes all the difference.Barclays has ridden to the rescue of the Big Four accountants as they face the threat of market-revolutionising reform from the Competition Commission.
The regulator is keen to crack open an £800m fee market that sees more than 95 per cent of FTSE 350 companies have KPMG, PricewaterhouseCoopers, Ernst & Young or Deloitte run the rule over their books. Proposals to help open this work to mid-tier firms, such as BDO and Grant Thornton, have included forcing corporates to change auditor after a set number of years.
But the UK's second biggest bank – which itself is considering changing auditor after 117 years of using PwC in one guise or another – has warned the regulator that any changes could be to the "detriment" of shareholders. In a commission inquiry submission, Barclays said: "The UK's current regime for the audit of financial statements, so far as it impacts on the business of international banking, is working for its shareholders."
The bank also said that there were "serious concerns" over mandatory rotation, with less familiar auditors "compromising audit quality".
Barclays estimates that for a group of its size, re-tendering would take two years and involve at least 200 staff.
The audit profession has come under fire for allegedly failing to spot the problems within the big banks that helped to cause and deepen the financial crisis. The Competition Commission will publish its final report on the market in September after the Office of Fair Trading referred the sector to the watchdog in October 2011.
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