During a press conference held today to present results from the quality control system regarding auditing activities for the 2024/2025 cycle, José Miguel Almeida, administrator of the Portuguese Securities Market Commission (CMVM), emphasized the need for auditing firms to expand in order to invest in technology, team training, talent acquisition, and system security to manage more complex audits.
“We know that this critical mass is achievable, as with all companies in the market, through a certain economic scale. This economic scale is derived from revenue and billing capacity, which provides the means to invest in activities,” stated the CMVM board member.
The report, released today and covering activities from July 1, 2024, to June 30, 2025, notes that mergers, acquisitions, and the entry of new shareholders into audit firms “can enhance auditing, provided there are effective governance, control, and internal supervision mechanisms in place to ensure the independence, quality, and integrity of the activity.”
Almeida highlighted that the supervisor is not advocating for mergers among auditing entities as a favored model.
“The CMVM has no bias towards mergers and acquisitions or organic growth. The CMVM is agnostic on this matter,” he clarified when asked to explain the regulator’s stance.
Organic growth, he noted, “is more time-consuming” and requires “an effort to attract clients, which naturally takes longer.”
For the CMVM, with the market open, “it is fundamental” that auditors “are well-prepared and evolve naturally according to market needs,” leaving it up to them to decide “how they want to organize themselves.”
“The CMVM is agnostic about the model,” he reiterated, emphasizing the importance of ensuring “good governance” when companies expand.
“The CMVM has been highlighting that, considering the exercise of auditing activities nowadays, [it is an activity that] requires critical mass,” he stressed, stating that “this critical mass allows for investments in technology, talent attraction, retention, team training,” system security, and hiring “specialists to support audits of more complex entities.”
“Being prepared in the past does not guarantee preparedness in the present, nor does it assure preparedness for the future, considering that we all operate in dynamic markets,” he said.
In the report released today, the CMVM identified 121 irregularities committed by auditing firms between July 2024 and June 2025, imposing 24 very serious and 32 serious fines.
