Goldman Sachs chooses Mazars for audit – but does it really matter?
Mazars has been selected as Goldman Sachs' European auditor, but Prof. Elaine Harris questions whether that means very much will change
Goldman Sachs has chosen Parisian accounting firm Mazars to audit its European operation, the first time that the bank has not chosen one of the Big Four accounting firms to conduct its audit.
The news, first reported by the Financial Times, is a major coup for Mazars, who are just the 8th biggest auditor in the UK. A spokesperson for Mazars confirmed the appointment but declined to comment further.
The Big Four make up around 97% of big companies’ audit, while Mazars has struggled to get a share of the FTSE 350 audit market, which makes Goldman Sachs’ decision a huge step forward for the French auditors.
PwC still group auditor
However, accounting professor Elaine Harris of Roehampton University questioned the significance of the announcement as Mazars was only named European auditor not group auditor.
“Financial services is a complex sector if you haven’t got experience in it, so it’s a responsibility [to be European auditor], but it’s not the top responsibility if you are not doing the group audit. That seems to me the crucial thing,” she said.
“To me, that means there’s going to be Mazars and PwC involved in the audit of Goldman Sachs. But ultimately, if you’re the auditor at group level you’re the one that signs off the ultimate annual reports.
Goldman Sachs reportedly overlooked all the Big Four firms as they all provide consultancy services to the bank. According to Prof. Harris this brings into question PwC’s role as group auditor for Goldman Sachs.
“The CMA have been looking at the split between audit and consultancy which is the other reason they’ve given for not keeping PwC for the European audit. But then what’s the difference between that and the group audit level? If they’re keeping them for the group audit, I’m not quite sure how that argument works.”
But despite these reservations, Prof. Harris was still convinced that this was an important moment in the future of audit.
“I don’t think it means nothing has changed. It’s significant for the guys at Mazars and its significant for Goldman Sachs.”
