Attack on foreign rules could damage UK profile

The body issued a consultation document late last week on the moves – imposed
by the EU –that could see FRC inspectors sent to places like Lebanon to
scrutinise foreign audit practices.

EU directives require the regulator to be sure about the auditing standards
of companies listed on UK exchanges, leading to the requirements.

‘The rules may make London less competitive. They are not as burdensome as
Sarbox rules but they’re the same kind, in that they apply to one territory for
companies coming in from another,’ said Paul Boyle, FRC chief executive.

UK Inspectors could also find themselves in China, Argentina and the Cayman
Islands, research indicated.

Deloitte partner Martyn Jones said countries like the Cayman Islands and
Bermuda would be among those most affected by the foreign auditor rules. ‘This
may lead to some companies delisting here. Enforcing high standards without
losing business will be the tightrope the regulator has to walk,’ said Jones.

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