Cairn Energy chairman, Norman Murray, is to lead a working group tasked with developing a code of best practice governance for firms that audit public interest companies.

The group's formation stems from a recommendation of the Market Participants Group, which considered proposals and advised the Financial Reporting Council on how to resolve issues of the lack of choice in the UK audit market.

Murray said that the development of the code of best practice governance is an important initiative on which consultations will be held widely.

His immediate task is the formation of an Audit Firm Governance working group, set to include individuals from accounting firms, investors and listed companies.

FRC chairman, Sir Christopher Hogg, said he was delighted that Murray had agreed to the appointment of chairing the group.

'His wide professional, commercial and governance experience in the UK and overseas will be of great value in ensuring that the results of the group’s work will be both practical and effective,' Hogg said.

Michael Izza, Chief Executive of the ICAEW – which is also part of the project – said the institute looked forward to Murray’s leadership.

'We regard it as an important part of the FRC’s overall project on Choice in the UK Audit Market. It is through initiatives such as this that together we can help to ensure that the UK audit profession remains world leading,' Izza said.