Nature and strength of competition in the supply of FTSE 350 auditsDeloitte’s response to the Competition Commission's working paper |
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Background
Deloitte’s response comments on the following areas:
- Expert and committed decision-makers
- Allegations of bias
- The nature of the tender process
- The nature of the reappointment process
- Price sensitivity of FTSE 350 companies
- Choice of auditor
Some of these issues are also covered in Deloitte’s responses to other working papers, namely a) Framework for the CC’s assessment and revised theories of harm, and b) Restrictions on entry and expansion.
Key Findings
The evidence shows that competition in the market for FTSE 350 audits is strong. This is facilitated first and foremost by the expert and committed nature of the buyers.
Furthermore, the evidence shows that the processes for auditor appointment, appraisal and reappointment (where appropriate) are robust and sophisticated.
Finally, the notion that companies are inhibited from tendering - whether due to uncertainty as to the benefits, or lack of choice, or otherwise – seems to have little evidential basis.
Download
Deloitte’s response to the Competition Commission’s nature and strength of competition paper (PDF)
