Characteristics of long audit tenure companies
Deloitte’s response to the Competition Commission's working paper
Deloitte has already addressed some of these issues in its response to the CC's Evidence on switching costs and its response to the CC’s Nature and strength of competition in the supply of FTSE 350 audits working papers.
Deloitte’s response also comments on the following areas:
- Client size
- Client retention and value for money
- Switching events
Companies that have long engagements with their existing auditor are not in a fundamentally different position from companies which switch auditors more frequently. The fact that they may tend to be larger or more complex companies has been shown by the evidence before the CC to have no bearing on the competitiveness of the audit services those companies receive.
Companies that receive high quality services and good value for money have no reason to switch their auditor. On the other hand, companies that are not satisfied with their auditor do tender and switch auditor.