FTSE 100 bosses close ranks with scandal-tainted Big Four auditors

EDINBURGH — The bosses of London-listed corporates don't want to break up the cosy audit industry cartel, known as the Big Four. This is presumably because the accountants at Deloitte, KPMG, PwC and EY know where the proverbial bodies are buried. There can be no other reason for large firms wanting to maintain the status quo, with huge accounting scandals unfolding in front of auditors who turn a blind eye or are complicit in creative financial reporting. The official reason for companies like BP, HSBC and Schroders wanting to keep the Big Four close is because there are concerns other accounting firms aren't up to scratch, reports the Financial Times. – Jackie Cameron.By Thulasizwe Sithole.The chief financial officers of the UK's largest companies have raised concerns about proposals put forward by politicians and regulators to shake up the audit market and eradicate conflicts of interest, reports the Financial Times. ."Their concerns were highlighted at a private meeting held last week at the London headquarters of the ICAEW, an industry body representing accounting firms and their staff. Senior figures from the influential 100 Group, which represents the views of FTSE 100 finance directors, attended," says the influential London-based pink paper.."They included Brian Gilvary, the group's chair and finance director of oil group BP, and Julia Wilson, the group's deputy chair and finance director of private equity firm 3i. Other City heavyweights were also present, including Sir Douglas Flint, the former chair of HSBC, and Jessica Ground, head of stewardship at Schroders, one of the UK's largest listed asset managers," it says..___STEADY_PAYWALL___."The aim of the meeting was to discuss proposed reforms of the audit market following a series of scandals that have called into question the quality of the work done by the four largest firms: Deloitte, PwC, EY and KPMG. Critics fear that the Big Four have become too dominant and too conflicted, and that audit quality is too low.".The FT highlights recent scandals at Carillion, BT and Tesco that have fuelled the outcry against audit giants. Prominent politicians have urged the UK competition watchdog to consider breaking up the Big Four, and the industry has itself mooted caps on market share as one potential solution. .The Big Four currently audit 98 per cent of the UK's 350 largest listed companies, continues the FT.."According to two people familiar with last week's meeting, the CFOs said they would be seriously concerned about any attempt to take the power to appoint auditors away from company boards. They were very keen on making sure that they weren't disenfranchised. If [an audit firm] is appointed who is not the first choice, then that is problematic," an unnamed source tells the FT.."The finance directors also raised concerns about the ability of firms beyond the Big Four to audit their businesses. This would become a more serious issue if caps on auditors' market share were introduced. ."However, several said they would like to see more choice in the market and an improvement in audit quality. The meeting was also attended by senior partners from each of the Big Four, as well as partners from smaller rivals Grant Thornton and Mazars," reports the FT.. Michael Izza, ICAEW chief executive, is quoted as saying: "One conclusion was that audit committee chairs could create choice by ensuring firms they want to tender are not conflicted — by not commissioning them for non-audit services. However, the main message overall was that while competition and choice are a serious issue, for buyers of audit services by far and away the biggest criterion is quality."

FTSE 100 bosses close ranks with scandal-tainted Big Four auditors

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