DTI report: ICAEW pledges support
The Institute of Chartered Accountants says it strongly supports Patricia Hewitt's measures to increase auditor independence, allow non-audit services, and increase the role of audit committees.
Link: Read the full report on Hewitt’s speech
ICAEW president Peter Wyman said the report sets out a ‘comprehensive and sensible package of measures’, which build on more than a decade of corporate governance and financial reporting reforms here in the UK.
‘I welcome the new role for the audit committee as the primary interface between the auditor and the company. This will do much to reinforce the auditor’s independence. Independence will be strengthened by more closely aligning the auditors with the audit committee, which itself comprises independent directors acting on behalf of shareholders,’ he said.
Wyman further pledged support to the DTI’s approach on the provision of non-audit services to audit clients. He was pleased the government had recognised that there are benefits to shareholders from non-audit services, such as tax advice.
And he reiterated his support for the role of the audit committee as recommended by the Higgs and Smith reviews published last week, and backed by Hewitt today.
‘By switching the key audit relationship from executive directors to the independent audit committee, Sir Robert Smith will have done more to enhance auditor independence than any rules-based approach could ever have achieved,’ Wyman said.