The Financial Reporting Council (FRC) has come up against the Competition Commission’s proposals for five-year audit re-tendering, claiming it would be costly and fail to increase competition among the big firms.
In response to the commission’s consultation on potential remedies for the statutory audit market, the FRC said that while it supports proposals to make more information available on audit quality, it has concerns over plans to extend the Audit Quality Review (AQR) reporting to all FTSE 350 companies every five years.
The accounting watchdog said there was a risk that tendering at five-yearly intervals would result in a “sham process” and would not be taken seriously.
FRC chief executive Stephen Haddrill said: “In particular, we are concerned that tendering on a five year basis will involve additional costs and risks to companies and firms.”
David York, head of auditing practice at the ACCA, told AccountingWEB...