FirmDecisions is the largest contract compliance consultancy in the world. We provide financial transparency in the client-agency relationship to the world’s biggest advertisers.
FirmDecisions in the press: Agencies are warned: don't insist that clients use only a 'big four' auditor
Stephen Broderick, CEO, FirmDecisions, has been featured in Campaign discussing the letter from the Institute of Chartered Accountants in England and Wales (ICAEW) to the six major agency groups on the decision to remove the 'big four' clause.
The letter said that it is up to an advertiser to appoint an auditor to check that the agency has stuck to its obligations. However, it is "not uncommon" for an agency to stipulate that "only one of what are commonly referred to as the 'big four' or 'nationally or internationally recognised' accountancy firms [Deloitte, EY, KPMG and PwC] may be chosen to perform the compliance audit".
According to the ICAEW in the statutory audit market, the ‘big four only' clauses have now been outlawed as unnecessarily restricting competition and choice. The letter continues saying that agency groups have been "unhelpful in terms of restricting market choice and competition" as any chartered accountant is held to "the same exacting standards, regardless of whether they are sole practitioners, small firms or large firms.
"In my experience, almost all of the big groups have ‘top four only' clauses in some clients' contracts and their starting point in negotiations is to insist on ‘top four’ only. Many clients don’t understand the implications of a ‘top four only' clause. It is often not in advertisers’ best interests for contract compliance work to be done by 'big four' auditors, as they are generalists and not specialist in media and marketing."
To read the article in full on the Campaign website, please click here.
First featured 22/10/2018.