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Ernst and Young loses grip on Lloyd’s of London audit

Ernst and Young’s hold on auditing Lloyd’s of London has lost some of its influence after its work was put out to tender. This could be a huge blow to the firm, which acts as an accountancy for contractors, as well as providing other services.

Lloyd’s said that that it is satisfied with the job that E&Y has been doing as its auditor but added that the audit should see a competitive tender this year. The market made the statement in its annual report for 2012.

Politicians and regulators have put pressure on the duration of audit tenures that the Big Four have with their clients. The Competition Commission has recommended that large-listed firms be obligated to tender or rotate at regular intervals.

The insurance market, however, does not fall under the proposed changes, but Luke Savage, finance director, and among the Hundred Group of Finance Directors, said that Lloyd does at least attempt to follow good practice for the FTSE 100.

He said that the tender process will only apply to the Big Four. A number of firms are attempting to rub shoulders with members of the large-listed audit market but some FDs are not confident that they will be able to handle such complex and large audits.

Savage said that the Lloyd’s model is so complex and that the requirements with regards to providing accounting advice and capabilities to make available the breadth of service they need will be difficult for small firms.

Posted by Mark
April 10, 2013
Research & Statistics

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