Posts Tagged “audit rotation”

Audit contracts are changing hands rapidly since the FRC and Competition Commission published their separate recommendations to enforce more frequent tendering of FTSE 350 audits. But recently KPMG managed to hang onto the Standard Chartered audit contract after it went out to tender in August of last year. Read more in our previous blog BIG 4 firm KPMG retains Standard Chartered audit

KPMG have been the banks auditor for 40 years and the big 4 firm earned around £9m last year from the audit.

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The European Parliament’s legal affairs committee have approved a draft agreement for EU audit reform in the hope that it will open up the EU audit services market beyond the dominant Big Four firms.

The EUs legal affairs committee voted in favour of the measures agreed in December. Read more in our previous blog Preliminarily agreement reached on the EU audit reform . These measures will force large-listed companies to change the firms that audit their accounts on a regular basis.

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The UK Competition Commission has put on hold its audit reform consultation process. The delay could last up to six months.

The delay is because of recent developments at a European level. The Commission had been aiming to be at the informal consultation stage but this stage won’t begin for the next four to six months.

Talks over the EU 10 year audit rotation have been on-going for some time and only recently were put on hold because of disagreements over the package of legislative measures. Read more in our previous blog Talks over the EU 10 year audit rotation have been put on hold

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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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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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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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