Audit Commission consultation rings in the changes
The Audit Commission break-up has begun with a consultation period lasting until 30 June
LOCAL PUBLIC BODIES could be required to create independent audit committees to choose their auditor, under proposals by the Department for Communities and Local Government.
Larger public bodies could, in the future, require an audit committee with a majority of independent member. The proposal is part of the DCLG’s consultation into abolishing the Audit Commission.
Under the proposals the National Audit Office would prepare the audit codes of practice, with registration and monitoring undertaken by the professional bodies under the supervision of the Financial Reporting Council.
The consultation was announced on Wednesday, coinciding with the House of Lords report on the findings of its audit inquiry.
The government claims breaking up the Audit Commission, which currently audits public bodies or appoints external practitioners, will cut costs and support local accountability.
Organisers are asking for input on questions like how to balance experience criteria with fostering competition and encouraging second-tier firm growth.
The abolition was announced last year and stakeholders have until 30 June to give their two pennies worth.
If it were a private firm, the Audit Commission would be the fifth largest in the UK, and the Lords inquiry said if correctly handled, its disbanding could help reduce the dominance of the Big Four.