Grant Thornton International welcomes yet further recognition of the need for greater choice in the audit market
Yesterday's publication of the UK Financial Reporting Council's (FRC) Market Participants' Group (MPG) report into choice in the audit market confirms that the largest public interest entities in the UK have, in recent years, been unlikely to select non-Big 4 firms as auditors. As such, the loss of another Big 4 firm would be a major concern for investors and a risk within international capital markets.
The report identifies a wide variety of reasons which have led to, but more importantly preserve, auditor concentration in the UK. These range from a limited understanding of audit quality to limited share owner engagement on auditor selection.
The report recognises that the current status quo is not one upon which to build the future and calls for more efficiency, enhanced competition and greater choice.
Commenting upon the report, Ken Sharp, global leader - assurance services for Grant Thornton International said: "We welcome the FRC's suggestions in the UK which are aimed at creating a more efficient market. This is about both choice and capability. There are organisations such as our own whose member firms are already more than capable of auditing and do audit many public interest entities around the world. Grant Thornton International member firms are ready and able to meet the challenge."
Grant Thornton International member firms already have over 500 SEC issuer clients as defined by the PCAOB and our UK member firm is the number one auditor for listings on the AIM market. In addition, all of the organisation's member firms are equipped to provide the same high quality service to their clients wherever they are in the world through one single, continually updated, audit methodology worldwide.
Ken continues, "The tide is turning and historic market prejudices are eroding. Institutional investors are beginning to encourage large corporates to cast their net wider and many are now realising that choice is not so limited anymore.
Of course we acknowledge that there are a small number of the world's largest companies that, because of either scale or very specialist resource needs (such as the largest banks and insurance companies), are best served by a Big 4 firm. However, in my view, this is not the case for companies outside this relatively small group.
The focus of our member firms is one of providing clients, wherever they are in the world, with a strong, internationally accredited suite of services across the areas of tax, specialist advisory services and assurance. Grant Thornton International’s appointment of global service line leaders, of which I am one, should be seen as a strong signal of just how seriously we view this commitment to serving an increasing number of international clients. Grant Thornton International's plan is to double the size of our member firms' aggregate market share in public interest audits over the next four years. We believe we have already more than stepped up to the mark and will continue to invest our combined efforts to deliver the required level of quality and choice to clients wherever they are in the world."
Ends
For further information please contact:
www.gti.org
Notes to editors
About the FRC
The Financial Reporting Council is the UK's independent regulator for corporate reporting and governance. Their aim is to promote confidence in corporate reporting governance and to promote high quality reporting; high quality auditing; high quality actuarial practice; high standards of corporate governance; the integrity, competence and transparency of the accountancy and actuarial professions and their effectiveness as a unified independent regulator.
About Grant Thornton International
Grant Thornton International is an international membership organisation, with each member firm independently owned and operated. Services are delivered nationally by the member and correspondent firms of Grant Thornton International, a network of independent firms throughout the world. Grant Thornton International is a non-practising international umbrella organisation and does not deliver services in its own name or otherwise. Each member and correspondent firm in Grant Thornton International is a separate national firm. These firms are not members of one international partnership or otherwise legal partners with each other (with the exception of certain limited instances), nor is any one firm responsible for the services or activities of any other. Each firm governs itself and handles its administrative matters on a local basis. Although many of the firms now carry the Grant Thornton name, either exclusively or in their national practice names, there is no common ownership among the firms or by Grant Thornton International (with the exception of certain limited instances).
Member firms across the Grant Thornton International organisation are making investments to strengthen their domestic and global capabilities. Recent expansions by the member firms in India, China, Japan, Russia and parts of South America and a new member firm in Spain are but a few examples.
The report identifies a wide variety of reasons which have led to, but more importantly preserve, auditor concentration in the UK. These range from a limited understanding of audit quality to limited share owner engagement on auditor selection.
The report recognises that the current status quo is not one upon which to build the future and calls for more efficiency, enhanced competition and greater choice.
Commenting upon the report, Ken Sharp, global leader - assurance services for Grant Thornton International said: "We welcome the FRC's suggestions in the UK which are aimed at creating a more efficient market. This is about both choice and capability. There are organisations such as our own whose member firms are already more than capable of auditing and do audit many public interest entities around the world. Grant Thornton International member firms are ready and able to meet the challenge."
Grant Thornton International member firms already have over 500 SEC issuer clients as defined by the PCAOB and our UK member firm is the number one auditor for listings on the AIM market. In addition, all of the organisation's member firms are equipped to provide the same high quality service to their clients wherever they are in the world through one single, continually updated, audit methodology worldwide.
Ken continues, "The tide is turning and historic market prejudices are eroding. Institutional investors are beginning to encourage large corporates to cast their net wider and many are now realising that choice is not so limited anymore.
Of course we acknowledge that there are a small number of the world's largest companies that, because of either scale or very specialist resource needs (such as the largest banks and insurance companies), are best served by a Big 4 firm. However, in my view, this is not the case for companies outside this relatively small group.
The focus of our member firms is one of providing clients, wherever they are in the world, with a strong, internationally accredited suite of services across the areas of tax, specialist advisory services and assurance. Grant Thornton International’s appointment of global service line leaders, of which I am one, should be seen as a strong signal of just how seriously we view this commitment to serving an increasing number of international clients. Grant Thornton International's plan is to double the size of our member firms' aggregate market share in public interest audits over the next four years. We believe we have already more than stepped up to the mark and will continue to invest our combined efforts to deliver the required level of quality and choice to clients wherever they are in the world."
Ends
For further information please contact:
www.gti.org
Notes to editors
About the FRC
The Financial Reporting Council is the UK's independent regulator for corporate reporting and governance. Their aim is to promote confidence in corporate reporting governance and to promote high quality reporting; high quality auditing; high quality actuarial practice; high standards of corporate governance; the integrity, competence and transparency of the accountancy and actuarial professions and their effectiveness as a unified independent regulator.
About Grant Thornton International
Grant Thornton International is an international membership organisation, with each member firm independently owned and operated. Services are delivered nationally by the member and correspondent firms of Grant Thornton International, a network of independent firms throughout the world. Grant Thornton International is a non-practising international umbrella organisation and does not deliver services in its own name or otherwise. Each member and correspondent firm in Grant Thornton International is a separate national firm. These firms are not members of one international partnership or otherwise legal partners with each other (with the exception of certain limited instances), nor is any one firm responsible for the services or activities of any other. Each firm governs itself and handles its administrative matters on a local basis. Although many of the firms now carry the Grant Thornton name, either exclusively or in their national practice names, there is no common ownership among the firms or by Grant Thornton International (with the exception of certain limited instances).
Member firms across the Grant Thornton International organisation are making investments to strengthen their domestic and global capabilities. Recent expansions by the member firms in India, China, Japan, Russia and parts of South America and a new member firm in Spain are but a few examples.
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