UK watchdog to reclaim powers to ban auditors (updated)

Carillion

14/04/2022 07:35

(Adds more detail)
    LONDON, April 14 (Reuters) - Britain's accounting watchdog
will reclaim powers to ban auditors under proposals announced on
Thursday.
    The powers were previously delegated by government to
professional accounting bodies such as the ICAEW at a time when
the Financial Reporting Council (FRC) was a small watchdog with
much fewer resources.
    But after corporate collapses at builder Carillion, retailer
BHS and cafe chain Patisserie Valerie, the FRC is being bulked
up into a more powerful regulator to improve auditing standards
and take on a full suite of regulatory responsibilities.
    "The proposal will bolster the Financial Reporting Council’s
supervisory toolkit and enable it to become increasingly
assertive in holding audit firms to account for the delivery of
high-quality audit," the FRC said in a statement.
    "The FRC will be able to impose conditions, suspensions and
remove registration where required."
    One of three government-backed reviews following the
corporate collapses recommended in 2018 that the registration
powers should be repatriated to the regulator.
    The FRC said that it currently has insufficient powers to
address systemic issues at auditors such EY, KPMG, Deloitte and
PwC -- the so-called Big Four that audits the bulk of leading
companies in Britain -- and has to rely on the registration
powers of the professional bodies.
    The proposals https://www.frc.org.uk/auditors/audit-firm-supervision/public-interest-entity-auditor-registration
 are open to public consultation until May 26.
        

 (Reporting by Huw Jones
Editing by David Goodman)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))