Posts Tagged “audit firms”

Fees paid to the auditors of FTSE 350 companies for non-audit services has fallen by 24% over the last year, this is according to audit firm Grant Thornton.

The audit firm’s twelfth annual Corporate Governance Review shows that fees paid fell to 68% of audit fees in 2012 to 51.7% in 2013.

This is also visible among FTSE 100 companies, where non-audit fees on average now represent 33.7% of the external audit fee, representing a 43% drop.

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The EU member states have preliminarily agreed the EU audit reform but this will mean auditors will be banned from offering certain non-audit services to their clients.

EU member states preliminarily agreed the EU audit reform on Tuesday. Read more about this in our previous blog Preliminarily agreement reached on the EU audit reform

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Finally a framework of EU audit reform was preliminarily agreed yesterday. A last minute deal was reached between politicians saving the reform from more setbacks.

The framework of EU audit reform was preliminarily agreed yesterday during the final discussion between the Lithuanian EU Council presidency and the European Parliament, which will see companies forced to change their auditors every ten years, with the possibility of audit tenures extended if certain criteria are met. It is still subject to a final agreement by member states later in the week. The European Parliament is optimistic that the majority of member states will approve the audit reform.

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KPMG has posted all time high global revenues of $23.4bn £14.3bn or €17bn. This was mainly due to the strong growth in the emerging markets.

America grew by 6.7% while the EMA region grew by 2.6% with the strongest performances coming from Germany, Ireland and Switzerland. Asia-Pacific grew by 1.1% but India, Mexico, Africa and China saw a growth in the double-digits.

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The FRC has stated that it is still committed to the international auditing standards and has defended its decision to make changes to the UK auditing rules before recommendations are agreed at a global level.

The ICAEW criticised the FRC for implementing new audit standards when global changes were only being discussed. Read more here in our previous blog Global changes need to be made to auditor reporting rule 

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Talks on the European Union imposing mandatory audit rotation on auditors have been put on hold by British MEP, Sajjad Karim. The negotiations are to get companies to change their auditors every ten years. These negotiations have now been placed on hold because of disagreements over the package of legislative measures.

The proposed changes are intended to improve the competition between audit companies, encourage rivalry between audit firms, and to reduce the concentration of the audit services being provided by the Big Four accountancy firms of PwC, KPMG, Deloitte and EY. Many feel that the Big 4 firms dominate the audit sector.

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Unilever has dropped audit firm PWC as its auditor and appointed KPMG as its replacement.

Unilever is a global multinational consumer goods company. Its products include foods, beverages, cleaning agents and personal care products. Unilever has more than 400 brands, 15 of which generate sales in excess of €1 billion a year. It is one of the world’s largest consumer goods company and currently operates in over 100 countries.

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KPMG aims to help clients unlock tangible value of their ‘big data’. The audit firm is now branching into data and analytics (D&A).

Companies are trying to stay one step ahead of their competitors by analysing their data and changing it into meaningful insights. Even though companies see this as an important part of the business, some struggle to do it effectively. The challenges they face are trying to determine which data to collect and getting value from their analytics.

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THE EUROPEAN UNION may impose a mandatory rotation on auditors following an agreement by member states to open talks with the European Parliament.

Last week ambassadors of EU member states supported measures to cap non-audit fees and having companies switch auditors every 20 years.

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