Mazars’ response to BEIS statutory audit review consultation

In its response to the BEIS consultation on the CMA’s statutory audit market study, Mazars highlighted the importance of reducing current excessive levels of concentration in the market, increasing resilience, and focusing on stakeholders’ needs.

Mazars remains steadfast in its support of the CMA’s recommendations as a comprehensive package of measures and agrees that the changes, as proposed, will create a genuinely competitive audit market that addresses stakeholders’ needs. Previous attempts at reform have not brought about the necessary change, and the CMA’s rigorous, independent process has delivered a bold, meaningful and practicable path to reform. The firm strongly encourages BEIS to grasp this opportunity to implement the CMA’s recommendations in their entirety.

There is consensus that now is the time for change, and we look forward to working with our peers to deliver an audit market that works in the interests of society as a whole.

Phil Verity, Mazars UK Senior Partner, said: “We believe that substantial reform to the audit market is critical to the sustainable success of our largest companies and the wider economy. The CMA’s review represents the clearest opportunity in decades for real change, and collectively we must maintain momentum and pursue brave solutions. We are confident that implementation of the reforms as proposed by the CMA will create vastly improved market conditions for challenger firms, and in that case Mazars is committed to a programme of ambitious and sustained investment.

“We are pleased to share the detail of our response, and we welcome discussion on proposed solutions and implementation”.

Key points from our submission include:

Support for implementation of CMA recommendations as a cohesive package

• We support the implementation of the CMA’s recommendations in their Final Report as a cohesive package. 

Strongly support Joint audit for FTSE350 companies as proposed by the CMA

• In line with the above views, we strongly support the proposals for joint audit across the FTSE350 with each audit involving at least one challenger firm, subject to limited exemptions to be agreed with the regulator, some of which will be temporary in nature.

 Joint audit will enhance market resilience and provide challenger firms with incentive to invest 

• Adopting joint audit is the only means by which to build resilience in the audit market for Public Interest Entities and to provide sufficient incentive for challenger firms to make the significant investments necessary to build the necessary market share in the FTSE350 and other Public Interest markets. 

A strategic review needed of the future of audit regulation

• We support additional regulatory oversight of audit committees but consider a much more strategic review of the proposed new regulatory structure for audit committees and auditors is needed. 

ENDS