Last week the Institute of Chartered Accountants of Scotland published its response to the review of the running of the Foundation by suggesting that an independent body for audit regulation should be established.
The suggestions would mean a radical shake-up of the foundation and possible end to the current working of the Auditing Practices Board.
Under the framework the new body would be responsible for the registration of company auditors, monitoring of auditor performance, and enforcement and discipline procedures for errant auditors.
ICAS also said the body should be free to concentrate solely on the auditors of publicly listed companies and those in the public interest. Which companies fall into the area of public interest would be determined by the DTI, which would also have the power to designate professional bodies to deal with those that do not fall under the new body’s remit.
The new body would be financed from fees paid by the companies being audited rather than the auditors themselves, according to ICAS.
The proposals arose from the consultation document released by trade and industry secretary Patricia Hewitt in September, but were actually first developed by ICAS in 1995.
But while these suggestions have merit, according to some of the other institutes they do not cover all the issues that need to be addressed.
Anthea Rose, chief executive of ACCA, said: ‘While we accept listed company audit is an important aspect of public confidence, it is not the only one. Many of the present problems have their roots in ethical and corporate governance and there is a danger that focusing purely on audit will get in the way of a joined up approach.
‘ACCA’s council will debate several options in November and will make a full response to the government consultation at that stage.’
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