Views of investors and other stakeholders
Deloitte’s response to the Competition Commission's working paper
Deloitte’s response comments on the following areas:
- Nature of investor concerns: there is a widespread view that audits are important, though there are some concerns on reporting issues
- No barriers to switching: investors have raised no concerns as to any barrier to switching or to expansion by audit firms
- Investors are not a homogeneous group
- The CC’s specific question on unmet demand
It is important to note that the content of the audit report – and the desire of some investors for more detail – is unrelated to the number of competitors in the market for statutory audit, or the dimensions of competition between market participants. The content and format of audit reports is determined by statute and regulators, not individual firms.
It is clear from the working paper that the views of investors do not present any barrier to switching nor to the expansion of any audit firm. The large majority of investors indicate that they would be content for directors to select from a wider group of competent firms.
Deloitte believes that, overall, the working paper is a fair representation of the views of investors, but recognises that investors do not always agree with each other; and in comparing the views of investors, Deloitte finds it helpful to consider the value of the funds they manage.
Deloitte recognises that there needs to be a debate on audit reporting between all interested parties including regulators, investors and audit firms - and Deloitte is actively participating in this debate.