Sharing won’t work!

13/01/2021. London, United Kingdom. The new Business Secretary, Kwasi Kwarteng. Picture by Pippa Fowles / No 10 Downing Street

The Big 4 accountancy firms are now opposing the UK government’s move to force them to share the audits of large listed companies with so-called smaller firms.

The idea of shared audits in a key proposal to increase competition in the latest audit reform package, outlined by business secretary Kwasi Kwarteng.

Now it appears PwC, EY and Deloitte have all said the audit sharing scheme won’t work. Even KPMG, who have agreed to participate in a pilot, are sceptical that sharing audits will improve quality. Where is the evidence that more competition will happen, it asked?

Deloitte’s Stephen Griggs said there are many practical difficulties for challenger firms and companies when it comes to shared audits. He also believes they will deter UK listings and won’t increase competition.

EY felt shared audits could have ‘unintended consequences’ and actually increase risks in audit quality, and even affect firms resilience.

PwC agreed quality could be impacted and stressed costs may also rise as a consequence.

*The story was first broken in the Financial Times, and picked up by both CityAM and The Times.