如果英国竞争和市场监管局（CMA）坚持某种形式的双事务所审计 ——一家四大和一家相对规模较小的公司 – 而不是采取细分的市场份额上限，那么共同审计将会是更好的选择。
如果这发生，会给英国带来极大的机遇，“Kingman Review的监管和Brydon Review的高质量高效审计结合的结果是，他们会成为国际范例，让英国在解决影响其他地区的问题上显示出领导力。
To impose joint audit on the FTSE 350 market will involve significant disruption and cost and could take up to 10 years to implement without necessarily resulting in a wider choice of audit firms, ICAEW has warned
If the Competition and Markets Authority (CMA) insists on some form of two-firm audit – using a Big Four firm and one of the smaller, challenger firms – rather than adopting segmented market share caps, then shared audit would be the better option.
In its response to the Department for Business, Energy and Industrial Strategy’s (BEIS’) initial consultation on the CMA’s recommendations for reforming the audit market, ICAEW points out that the CMA proposal to introduce mandatory joint audit for most FTSE 350 companies has not been universally welcomed.
FTSE 350 companies are unhappy about the additional management time involved and the inevitable disruption that will result from having to tender for two audit firms, while investors will ultimately have to bear the increased costs of paying for two firms to do the audit work. “Until such time that evidence show that joint audit increases audit quality, shareholders may not welcome the higher costs that joint audit will likely impose on the audited entities,” the response says.
This is important, given that the “paramount issue” at the heart of all the different projects relating to audit – Kingman, the CMA, BEIS Committee and Brydon – is audit quality and ensuring it continues to improve to meet the expectations of audit stakeholders.
“The actual number of competitors operating at any time is an important but secondary aspect and not necessarily directly connected to audit quality,” ICAEW says. “It would not be a positive outcome if regulatory or legislative interventions brought more firms into the market for large corporate and PIE [public interest entity] audits, but seriously jeopardised quality and significantly increased costs for audit customers.”
Nevertheless, ICAEW believes that joint or shared audits would help the challenger firms acquire relevant experience and, “with sufficient time, effort and goodwill”, either could be made to work although both face “significant practical obstacles”.
For instance, they would take time to implement as they would need to be phased in as and when existing audits come up for tender. Challenger firms would have to invest in recruiting and training new staff, adapting their audit processes and enhancing their quality control and risk management systems.
There is also the vexed question of insurance. As ICAEW says, “The prospect of joint and several liability is likely to be unattractive to both audit firms in a joint audit situation.
“Under the current regime, firms are not just held accountable for their own actions but also, potentially, for the actions of those in the company and the other audit firm. Each joint audit firm would become liable for the work of employees of another audit firm over whom they have no control or supervision and little means of managing their risk exposure.
“Challenger firms would become liable for the actions of the Big Four firms on very large and complex audited entities where existing professional indemnity cover may be insufficient.”
ICAEW suggests that the challenger firms might need to establish self-insurance schemes to cover the higher level of risk. “The liability regime is likely to prove a barrier in many situations without some reform.”
The advantage of shared over joint audit is that liability could be apportioned according to which components of the audit the firm carried out. They would also be cheaper because they do not involve the same duplication of work.
ICAEW also urges BEIS not to mandate operational splits in the Big Four firms between audit and non-audit practices. It says there is no evidence that audit partners participating in the overall profits of the Big Four has any effect on the quality of the judgments they make on their audit engagements. The focus instead should be on strengthening and reinforcing the overall culture within each firm.
It also rejects the idea of keeping the threat of a full structural separation in reserve as a future measure. Implementation would be both costly and potentially damaging. “The complexities of contracting independent expertise, often during a condensed ‘busy season’, and the potential reaction of the international networks of the affected firms, should not be underestimated.
“We do not see any net benefit to the UK market for large company audits from a full structural separation,” it said.
Given the “untried” nature of some of the CMA proposals and their potential consequences, ICAEW would like to see further consultation, as well as pilots of joint and shared audits, to ensure that the final package delivers effective reforms.
If that happens, it would open up opportunities for the UK. “The outcomes of the Kingman Review of regulation and the Brydon Review of the quality and effectiveness of audit may well combine to produce a programme which becomes an international exemplar and allows Britain to show global readership in developing solutions to issues affecting many other major jurisdictions.”
ICAEW also draws attention to the importance of the UK continuing to be a “fair, open, welcoming economy for inward investment” post-Brexit.
“Robust audit and corporate reporting are a key part of this, but it must not be a disproportionate cost.
“We should be careful to ensure that the package of measures supports and strengthens the audit sector in the UK and does not impeded its international competitiveness as a key export.”