PracticeAuditScicluna: Smith report needs more work

Scicluna: Smith report needs more work

Clarifications are still needed to the Smith report on company audit committees before it becomes part of the combined code on corporate governance, one of the UK's most senior accountants has said.

Link: Smith report strikes at the heart of corporate governance

Deloitte & Touche chairman Martin Scicluna has said the report is ‘sensible and is a good template for the interaction between audit committees and auditors’. But he added that it had been linked to the combined code in ‘some haste’.

Writing in today’s Financial Times Scicluna said the Higgs report was missing a provision ’emphasising the responsibility of institutional investors’. a point made recently by George Cox, director general of the Institute of Directors.

Higgs has come under scathing criticism in recent weeks amid calls for its integration into the combined code, due on 1 July, to be delayed while amendments and clarifications are made.

The Smith report on audit committees was published at the same time as Higgs and recommends that committees should be made up of no less than three independent directors with at least one of them possessing recent and relevant financial experience. It also states that audit committees should have the principle responsibility of appointing an auditor.

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