France points way for UK shake up of audit market

LONDON - Taking on the Big Four accounting firms will remain a lengthy and costly challenge for smaller rivals in Britain despite the regulatory leg-up unveiled on Thursday, but France has shown it can be done over a decade.

Though the changes are likely to take some time to make it into law, joint audits in France have enabled smaller rivals like Mazars to work alongside the Big Four and win the confidence of bigger clients. Deloitte, for example, employed 286,000 staff in 2018 compared with 80,000 at BDO and 52,686 at Grant Thornton, according to IAB.

“Shareholders, audit committees and the regulator must have total confidence in the ability of these firms to complete this work before the market can move ahead with this recommendation,” KPMG said. The CMA said only 44 percent of the 120 top listed companies in France are audited by two Big Four firms, and challengers often have around 40 percent of the joint audit.

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