Our Clients: Assurance

 

Audit Transformation Program (ATP) and Aura

We have invested heavily in the new Audit Methodology that was used on a number of assignments during this year on a pilot basis. The new technology platform was enthusiastically accepted by our audit teams and is in use for all audit assignments as from 1 July 2011.

This is expected to improve the audit efficiencies and effectiveness thus bringing greater value to our clients and people.

The key element of the new methodology (tools, behaviours and delivery method) address the fundamental elements of our business. These elements are equally important and are closely linked facilitating the delivery of PwC Experience and will help us achieve our vision of providing a differentiated, value-adding and high quality audit service for the benefit of our clients, our people and our business.

The development of the new tool (Aura) is a journey and new versions are planned to be released during the years 2011 & 2012 focusing on speed and performance improvement to make the tool more reliable, run more efficiently, use less memory and operate faster.

Increasing regulation

Following the financial crisis we are facing increased scrutiny from Regulators. We participate in the European Contact Group responsible for public policy and regulatory matters in the European Union. It should be noted that the Green Paper on Audit Policy was issued by the European Commission on 13 October 2010. This paper includes a number of suggestions, some of which very radical, which if adopted will change significantly the audit profession as we know it today and bring about wider effects to the dominance of the Big Four; the Big Four which are frequently referred to in the Paper as “systemic firms” owing to the systemic risk attached to them resulting from the potentially severe crisis that may allegedly arise in capital and financial markets in the event of collapse by one of them. 

We support measures which promote competition and transparency, enhance independence and deliver greater quality, while not imposing increased costs or red tape on businesses. Such measures include: 

• the prohibition of contractual clauses which require the use of a Big Four or Big Six audit firm; 
• changing the ruling governing ownership of audit firms and liability reform; 
• improving communication between regulators and auditors; 
• ensuring Audit Committees as the main representative body of shareholders provide greater transparency including the disclosure and oversight of any non-audit services supplied by auditors; and 
• allowing small and medium sized firms to compete for large institutions’ business. 

In view of the impending EC Council Presidency of Cyprus for the second half of 2012 we work closely with our colleagues to influence the debate on Audit Reform. 

PwC brand 

The changes to the PwC brand were launched in the last quarter of the year 2010. The main driver for the changes is the emphasis given on building relationships to create the value clients are looking for. Putting value at the heart of our discussions with clients and the wider community will be a key element in separating PwC from the competition. In addition we will stand by our promise for the continuing engagement of our people.

Results and competition 

The Assurance revenues held up well, given the adverse economic conditions in Cyprus, the Eurozone and globally, at €23.9million compared to €24.8million in FY10. Despite the very difficult economic conditions and the sluggish economy, demand for Assurance services is strong, but good performance was more that offset by pricing pressure from local and international clients in a very competitive market place. 

Competition among the Big four firms but also by smaller practices has increased significantly with competitors seeking to win work by lowering prices. We maintained our leading position as the market leader in the provision of Assurance services by competing on the basis of the quality of our services. Maintaining and improving quality is our first imperative and a fundamental pre-requisite in achieving growth. We keep fully up to date with updates on IFRSs, regulatory activity, coverage and governance

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