Auditor calls for shake up

GRANT Thornton, the fifth largest audit firm, has urged the government to review the market share held by the big four accounting firms in a bid to reduce threats to the financial markets should one of them fail.

In a submission to the House of Lords’ inquiry into auditors, and as reported by the Financial Times, Grant Thornton has said that financial markets would be significantly impacted should either PwC, Deloitte, KPMG or Ernst & Young collapse as they audit the majority of FTSE 100 companies.

Grant Thornton, led by chief executive Ed Nusbaum, said in the submission that the collapse of any of the largest accountants was a “tangible rather than a purely academic risk”.

The accounting firm has called on the government to establish an oversight body that would implement limits to the number of large UK companies any one firm could audit.

It has also said that regulators should suggest to large corporates that they hand more audit work over to the smaller firms.

The House of Lords economic affairs select committee is currently investigation the audit profession, including competition concerns over the market dominance held by the big four accounting firms.