If the European Union's internal market and competition authorities were looking for something to do, they've found it now. Four mid-sized accountancy networks have made a joint approach to Brussels to attempt to turn the heat up on the simmering issue of competition in audit. BDO, RSM, and Grant Thornton ranks fifth, sixth and seventh in the market for audit, but they are each a long distance behind the Big Four. Mazar's is even further behind. But the four firms think there is a "credible alternative to the status quo". They claim that voluntary market based initiatives that have been tried in some countries haven't done the trick, so a new approach is needed. - Contractual constraints: The firms want prohibition of contractual clauses and other institutional bias in favour of the four dominant firms.
- Reassessment to prompt rotation: Companies should be required to undertake regular reassessment of audit appointments thereby ensuring that audit committees and shareholders determine whether the current audit offering meets their needs and to look at the approaches of alternative firms.
- Enhanced scrutiny: Authorities around the world should undertake "cooperative and global assessment" of significant mergers or acquisitions by globally dominant players whose consequence is to prevent others from developing international capabilities that will provide a real and credible choice.
Source document: The Mazar's version of the joint statement explains its thinking.
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