The debate continues over what can be done to improve the image of audit in the UK. My personal view is that we should be looking into ways to move to a model where the shareholders are essentially choosing the audit firm.
A discussion between the shareholders and the auditors about the scope of the audit, and possibly alternative assurance procedures, would do a couple of things in my opinion:
- Help to narrow the expectation gap
- Enable the shareholders to choose the level of assurance they want and on what. Different levels of assurance on different elements of the Annual Report and Accounts would come with different fees levels.
I don't think such a change would be an easy thing to achieve as different shareholders might want different levels of assurance. So this wouldn't be a quick win. But I do think it would change the dynamic in this marketplace.
Stephen Haddrill, chief executive of the Financial Reporting Council that regulates accountants, said Britain’s Competition and Markets Authority should investigate the case for “audit only” firms in an effort to bolster competition and stamp out conflicts of interest in the sector.