The recurrence of a popular lobbying line is also going on in respect of lobbying against reforms to the audit market. I picked the phrase "costly and disruptive" out from the Institutional Investor Committee policy document on audit (in part because I know that the IIC paper has caused a bit of a stink) and stuck it into Google with "mandatory rotation" (a policy the IIC paper has been used to lobby against).
It turns up a few interesting hits, including some papers issued by the investor trade bodies. As you might expect, both IMA and ABI docs use the phrase "costly and disruptive" (this is not that surprising, as both are, of course, members of the IIC). The interesting question is which came first. The earliest use (1st March 2011) of the phrase seems to be in the text of a verbal IMA report to the Committee on Legal Affairs of the European Parliament. In this context, what the IMA put in its annual report a couple of years back is also worth noting:
The ABI also used the phrase "costly and disruptive" in its response to Competition Commission investigation into the audit market this year. In fact it's worth a fuller quote from the response, as it shows how lobbying text has been recycled over a few years:“We issued a statement under the auspices of the Institutional Investor Committee, questioning the potential effectiveness of the proposals and their detrimental effect on audit quality, and have given evidence at a hearing in the European parliament.”
Mandatory rotation would be likely to be costly and disruptive. Companies could be forced to change auditor at a time when the existing auditor’s familiarity with the business would benefit the audit, such as when there is a major acquisition or merger.By comparison here is an excerpt from an IMA letter to the EU Commission in December 2010:
Mandatory requirements could mean that companies are forced to change auditor at a time when the existing auditor’s familiarity with the business would benefit the audit such as when there is a major acquisition or merger.So the same policy position (opposition to mandatory auditor rotation) has been advocated using the same text, by two different organisations, and sent to two different recipients (with different geographical reach) two and a half years apart. And the chronology suggests the IMA created the text that has been reused.
But in a way that's the easy stuff, look at the range of other uses of the phrase "costly and disruptive" in relation to auditor rotation -
The Investment Company Institute (lobby group for mutual funds I think?)
US Chambers of Commerce
E&Y (which suggests to corporate clients what they might like to think)
A bit like the private equity example a few years back, my initial reaction to this would be to conclude that it's just a good lobbying line that is getting mindlessly recycled. But the more I see of this kind of stuff (and I think I'm still just scratching the surface) the more I wonder.