Pension funds comment on Competition Commission's audit market inquiry
22 February 2013
The National Association of Pension Funds (NAPF) welcomed the preliminary findings of the Competition Commission inquiry into statutory audit services announced today.
Joanne Segars, Chief Executive, NAPF, said:
“Auditors are appointed to protect shareholder interests, but are seen as insufficiently independent from executive management and insufficiently sceptical in carrying out audits.
“The audit market needs structural change to increase trust in financial statements and improve auditor accountability to shareholders. We want to see greater, more effective competition.
“It is unsatisfactory that audit tenures can stretch for decades, and we need new measures to increase the rate of rotation and maintain auditor independence. We support mandatory re-tendering to improve competition and cut the average audit firm tenure, and also want to see a legal cap that would ensure a maximum run of 15 years with one firm.
“We would also welcome more informative reporting by both the audit committee and the auditor. Improved reporting would give investors more confidence in the quality of the audit and enable investors to be able to engage further with the audit committee, who are the directly elected representatives of shareholders.”
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]