Posted by Tax Innovations on 27 Sep 2011
Big Four Auditors Face Anti-Competition Legislation Changes
Although early days as yet, a draft law set to be published by the EU Internal Market Commissioner Michel Barnier could see the big four global auditors being broken up in a plan to boost competition.
The Big Four Auditors
KPMG, Ernst & Young, Deloitte and PwC check the books of almost all large companies in the world and the Commissioner sees this as a both anti-competitive and also a conflict of interest whereby auditors provide consultancy services and auditing services to the same customer.
The draft law has put forward the proposition that auditors either be banned from providing consultancy services to companies they already audit, or perhaps banned from consulting entirely.
The European Parliament has given the plans its broad backing this month and the Office of Fair trading stated in July that a competition probe into the sector is warranted.
Under the plans to be formally proposed in November, companies with balance sheets greater than €1bn would have be legally obliged to hore two auditors to carry out a joint audit of their books and one of these must be a firm from outside of the big four.
Another proposed change would be to enforce a ‘mandatory rotation’ of auditors, meaning that auditors would not legally be allowed to work for a big company for more than nine years.
More about the story can be found at FT.com.
Contact Tax Innovations
Contact us if you have any questions in regards to this article.
- Property Partnership Incorporation and SDLT
- Changes to the Taxation of QNUPS
- Tax on separation and divorce
- Tax Relief For Residential Mortgages
- Finance Act 2018 Enacted