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Evidence relating to the selection process: tendering, annual renegotiations and switching

Deloitte’s response to the Competition Commission's working paper

Deloitte’s response to the Competition Commission's selection process paper


Deloitte’s response comments on the following areas:

  • The evidence relied upon by the CC in preparing the working paper
  • Tender process: 
    - evidence of a detailed tender process
    - evidence of innovation
    - opportunities outside a formal tender process
    - costs of participation
  • Renegotiation:
    - evidence of a detailed renegotiation process
    - robustness of benchmarking
  • Switching: effects of switching
  • Additional comments contained in an annex

Key Findings

The CC’s working paper appears to rest on an implicit assumption that only formal tendering generates a truly robust outcome for a company in terms of ensuing optimal value and quality from the audit. However there is no good basis for, and no evidence has been gathered which supports, such an assumption.

We consider there to be significant evidence that tendering and annual renegotiation processes are robust, and that companies perform numerous exercises to reassure themselves that their tender and reappointment/switch decision is correct.

Based on the informed nature of purchasers, who are well able to determine whether or not their company would benefit from tendering and/or switching auditor, the evidence base does not support any conclusion that auditor selection processes, or their outcomes, are anything other than optimal.  


Download Deloitte’s response to the Competition Commission's selection process paper (PDF)


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