Audit market review “vital to rebuilding public trust”, says ICAEW
Amid unprecedented public and political scrutiny, the UK’s competition watchdog has announced it will investigate the audit market, focusing on choice, switching, resilience and incentives.
In October 2018, the Competition and Markets Authority revealed that it would carry out another investigation into the UK’s audit market, examining concerns that the market is not working well for the economy or investors.
CMA chairman Andrew Tyrie said: “If the many critics of the audit process are right, it is not just the companies which buy audits that lose out; it is the millions of people dependent on savings, pension funds and other investments in those companies whose audits may be defective.”
The CMA plans to issue provisional findings before the end of the year.
Responding to the announcement, ICAEW Chief Executive Michael Izza said: “This is a very positive development, and I believe the accountancy profession as a whole will welcome it. It will need to coordinate closely with other processes already under way, such as the review of the operation of the FRC by Sir John Kingman, and the initiatives set out yesterday by the FRC itself.
“However, it is vital that we rebuild public trust in audit – the success of UK business depends on it.”
The news follows the publication of the Financial Reporting Council’s ‘Developments in Audit’, which highlighted audit quality, enforcement, investor needs, auditor independence and the assessment of company viability.
Izza said: “I want to reassure members that ICAEW will continue to play a leading role in supporting these reviews, addressing the audit expectation gap and restoring trust.”
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