Pricewaterhouse Coopers Attacks FRC’s Suggestion That the Audit Commission Could Become the Next Big Firm
PricewaterhouseCoopers has rounded up FRC, which is UK’S corporate reporting watchdog, over its suggestion that the Audit Commission can be transformed into a Big 5 audit firm.
Paul Woolston, who is head of Public Sector Assurance at PricewaterhouseCoopers, criticized the FRC’s suggestion.
Financial Reporting Council had suggested that the Audit Commission could be used to create a 5th player in the large UK audit market, which is currently being dominated by the Big 4 firms, namely, PricewaterhouseCoopers, Ernst & Young, Deloitte and KPMG.
Woolston was of the opinion that FRC had made an ironic suggestion, and that the Audit Commission was itself holding a monopoly in the audit market.
Woolston said that he found it odd that the FRC was concerned about what market share any organization had in the field.
In a report submitted to the House of Lords Economic Affairs Committee, the FRC had said that the abolition of the Audit Commission could be used successfully to create greater competition in the audit market.
FRC had stated: “The commission’s in-house audit practice is the fifth largest in the UK…if secured by a non Big Four firm it would enhance their scale and strength and so reinforce their ability to compete.”
The Audit Commission will be abolished in 2012. It is presently responsible for auditing 11,000 bodies. The bodies together spend about £200 billion of public money.
The Audit Commission clocked up a revenue of £213 million in 2010, which was only slightly lesser than £216 million in 2009. The public sector audits are distributed among a handful of firms, chief among which are the Big 4 firms.
Woolston said that he was happy that other firms would compete in the tender process of the Audit Commission.