‘It does not sit right’: Auditor fires back at Sorrell’s ‘conflict of interest’ claims over ANA transparency report
The boss of the auditing firm behind a controversial report into media agency practices has rejected WPP boss Sir Martin Sorrell’s claims that it has a conflict of interest, claiming “it just doesn’t sit right” that media agencies should be dictating to clients who should be auditing them.
Sorrell has taken aim at FirmDecisions during an Australian tour.
Yesterday saw the release of the second part of an ANA report into media agencies in the US, which found “non transparent practices” were “pervasive” and recommended among other things that clients should be given more powers to audit their media agencies to ensure they are being open and honest with them.
But Sorrell, boss of the biggest agency holding group in the world, accused Ebiquity’s forensic auditing division Firm Decisions which authored the recommendations of a “conflict of interest” in an interview with The Australian.
“Ebiquity is in the business of generating audits and it’s recommending further audits,” Sorrell said. “People talk about conflict of interest. If ever there was a conflict of interest it must be the position of Ebiquity recommending audits — being an auditor.”
But the global CEO of Firm Decisions Stephen Broderick has hit back, telling Mumbrella: “It just doesn’t sit right with most clients that the those being audited should be able to dictate who does the audits.”
Broderick: Sorrell’s claims ‘do not sit right’
He added: “All I can say is that Firm Decisions’ position of who can carry out the audits is very clear. It is the client’s choice, and this is what respected industry associations such as ISBA and the ANA are recommending within their guidelines and contract templates.
“If a client wants to use a specialist they can, and if they want to use a top four non–specialist they can, but they must have the choice. Let’s also remember we are not talking about auditing in the statutory sense, we are talking about compliance auditing.”
Australia is the only country in the world where a WPP agency has admitted to misusing value banks – free or discounted media space given to media agencies by media owners in return for a guaranteed advertising spend.
Last year GroupM agency Mediacom admitted it had sold media space which should have been passed on for free to four major clients. That revelation emerged as part of a wider audit into the agency following revelations a group of employees had been falsifying results of TV campaigns for clients, which was carried out by accounting firm EY.
In other markets, such as the US, Sorrell has categorically denied that the holding group engages in media rebate practices.
The comments are the latest attack on Ebiquity by WPP, after GroupM launched legal action in the UK against Firm Decisions accusing it of misusing confidential documents it was accidentally sent by, amongst others, Mediacom Australia.
Firm Decisions boss Broderick did not respond to questions about whether the legal action might have been motivated by the auditor’s involvement in the ANA transparency report, but did note that it was “vigorously defending” the court case and argued that it was GroupM staff who had breached confidentiality.
“With regard to the court case, Firm Decisions is vigorously defending the action that was brought by WPP because they sent us confidential client information in error,” said Broderick.
A spokesman for the ANA declined to comment on Sorrell’s remarks.
