The Irish arm of the accountancy firm Grant Thornton has come out swinging in response to the apparent watering down of fresh auditing rules proposed this week by the European Commission.
Following complaints that auditors of major financial institutions prior to the crisis were the watchdogs that didn’t bark, European authorities announced plans to encourage big companies to hire separate firms for auditing and juicy advisory work.
It was also meant to break the auditing stranglehold of the big four – Deloitte, EY, KPMG and PricewaterhouseCoopers.
The commission this week reached agreement that companies will only be able keep their auditors in place for up to 20 years – 10 years initially followed by another 10 if its put out to tender.
A limit of six had originally been mooted, but got lobbied to death by the big four.
The local division of Grant Thornton said the changes “don’t go far enough” and cited a GT survey that said most Irish businesses want more competition in the auditing market.
In reference to the big four's grip, Aidan Connaughton, GT's audit partner, said: "The support is clearly there in the Irish business community for a weakening of the current oligopoly. It has not served investors or taxpayers well." Those are fighting words ... from an accountant.
Michel Barnier, who took Charlie McCreevy’s old job as the commission’s internal markets chief, said this week the new law would reduce “excessive familiarity” between auditors and their clients – the implication being that they might bark louder next time if they’re not so pally with their paymasters.
A 20-year rule to reduce excessive familiarity? Is he for real? The average American marriage lasts less than half that long.