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