OTS: Mazars GmbH & Co. KG / Study: The auditing market needs a …

Study: The auditing market needs a new market design

Frankfurt/Dusseldorf (ots) –

– The “Public Interest Entities” market segment has fundamental functional deficits

on

– Market concentration and barriers to entry prevent effective competition,

endanger financial stability and threaten growth

– Study outlines reform options and creates a basis for discussion for new ones

market design

The auditing market for public companies, certain banks

and insurance companies (so-called companies of public interest, public interest

Entities, PIEs) is highly concentrated and has fundamental functional deficits

on. This is the result of a current study commissioned by DICE Consult

of the auditing and consulting company Mazars.

“Functional deficits impede effective competition, impair the

audit quality and jeopardize the stability of the financial markets,” says Prof. Dr.

Justus Haucap, Director of the Düsseldorf Institute for Competition Economics

(DICE), partner of DICE Consult and former member of the Monopolies Commission.

This advises the federal government on questions of competition policy and

market regulation.

FISG: The German answer to Wirecard

After the multi-billion dollar fraud scandal involving payment processor Wirecard

with the Financial Market Integrity Strengthening Act (FISG) including the external one

Shortened rotation requirement, a sharper separation of final exam and

(Tax) advice and the liability limits have been raised. the study

According to him, there is still a need for adjustment because the FISG harbors the risk

Increase market concentration and barriers to entry. “In extreme cases it will be over

the oligopoly a duopoly or even a monopoly. So effective competition can

out of the question,” warns Prof. Dr. Haucap.

Decisions based on trust

True and reliable information is an important prerequisite for

Another finding from the study is that markets function efficiently.

In corporations, management has an information advantage

to owners and potential investors. “Speaking in science

we of information asymmetries”, explains Prof. Dr. Haucap. “The

Auditing has the task of reducing this imbalance. That

Attestation is a seal of quality that market participants rely on.” Wrong

and unreliable financial statements could lead to wrong investment decisions

lead and undermine shareholder control over management

serious consequences for the financial markets, for jobs, pensions and

savings in the population.

“The role of auditing is one for society as a whole

responsibility that goes beyond pure figures.

Auditors create trust,” says Dr. Christoph Regierer, spokesman

of the Management Board of Mazars in Germany. “It’s in public

Interest that the functional deficits in the PIE exam market are addressed.”

New market design required

From an economic point of view, it would not be about further regulatory interventions,

according to the study authors. Instead, these refer to measures that

solve structural problems in the PIE market. are conceivable

for example joint examinations according to the four-eyes principle

state auditor appointment, the capping of market shares or the introduction

of competition-sensitive criteria for the award of public

audit assignments. “Our study shows solutions like the one in

the goal agreed upon in the coalition agreement can be achieved, namely the high

counteract market concentration,” explains Prof. Dr. Haucap.

About the study

The study “Functional deficits in the auditing market” is out on May 12th

2022 as part of a digital live event. guests of

subsequent panel discussion were Prof. Dr. Justus Haucap (DICE Consult),

Katharina Beck MdB (Bündnis 90/Die Grünen), Fritz Güntzler MdB (CDU), Prof. Dr.

Heribert Hirte (citizens’ movement Finanzwende) and Evelyne Freitag (supervisory board member

and financial expert). The study report can be downloaded here (https://www.mazars.de/Home/ber

-us/news/press-media/publications/studies/study-deficits-on-the-host

haftprüfungsmarkt) can be downloaded.

About DICE Consult

DICE Consult GmbH, based in Düsseldorf, advises public and private clients

Institutions in all questions of competition and regulatory policy.

Based on in-depth knowledge of the market, DICE Consult provides a broad

Offer of theoretical and empirical economic analyzes for all questions

with competitive economic relevance. DICE Consult is also a partner of the

Düsseldorf Institute for Competition Economics (DICE) at the

Heinrich Heine University Düsseldorf, the leading academic center for

Competitive Economics in Germany.

About Mazars

Mazars is an internationally integrated partnership based on the areas

Assurance, Tax and Legal¹ and Accounting, Financial Advisory and

Consulting specializes. We are in over 90 countries and regions of the world

active and draw on the expertise of more than 44,000 professionals –

more than 28,000 in Mazars’ integrated partnership and more than 16,000

through the Mazars North America Alliance – to serve clients of any size in any

support their development phase.

Mazars has 108 partners and almost 1,780 employees in Germany

represented at twelve locations and with an annual turnover of over 204

million euros to the leading multidisciplinary examination and

consulting companies.

¹Where permitted by applicable state law.

http://www.mazars.de

Press contact:

Mazars GmbH & Co. KG

Christina Bertholdt

Marketing & Communication

Tel: 0171-8302688

Email: mailto:[email protected]

Further material: http://presseportal.de/pm/75271/5220907

OTS: Mazars GmbH & Co. KG

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