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10.09.2012: EU waters down auditing restrictions in boost for big four accountancy firms

Companies will have to change their auditors - but only every 25 years - under new watered-down plans to overhaul the accountancy profession.

MEPs in Brussels have argued for the proposal as part of their response to radical plans from the European Commission to overturn the dominance of the Big Four firms - PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young.

Some companies have been with their auditor, or its predecessor firm, for more than 100 years. Unilever can trace back its involvement with PwC to 1890.

James Roberts, a partner at BDO, a challenger to the Big Four, said: 'I suppose 25 years is a backstop position. Brussels legislators have taken the view that they don't want to change the market structure.'

The proposal emerged in a draft report by British MEP Sajjad Karim. His report will form the basis of discussions among MEPs - and ultimately contribute to a final proposal after discussions with the European Commission and the council of ministers.

The UK's Competition Commission is separately looking at whether the dominance of the Big Four needs to be tackled, and how it could be done.

It is due to release a report on auditors' profitability in the next few weeks - and will meet with representatives of the big firms at the end of the month.

 

Source: This is Money

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