Scandal-hit auditors face tougher rules as watchdog unveils proposals to improve accountability and board independence
Britain’s accounting watchdog has unveiled proposals to beef up audits following a string of scandals in the sector.
The Financial Reporting Council (FRC) kicked off a consultation on rule changes which would force a shake-up at the so-called Big Four bean-counters.
It wants to alter the Audit Firm Governance Code to improve accountability and board independence at EY, KPMG, PwC and Deloitte.
Crackdown: The Financial Reporting Council (FRC) kicked off a consultation on rule changes which would force a shake-up at the so-called Big Four bean-counters
All of those firms have been slapped with multi-million pound penalties in recent years for shoddy audits.
Some of these errors have cost shareholders, staff and even the Government billions of pounds.
One of the key changes to the code will see the chairman of the board separated from the roles of senior partner or chief executive.
This would help clarify the role of boards in holding management to account, the FRC said.
Mark Babington, the FRC’s executive director of regulatory standards, said: ‘These proposals will provide a springboard for further progress in improving audit quality and market resilience.’
Responses to the consultation must be sent by November 18.