ABI calls for audit crackdown
Insurance industry watchdog The Association of British Insurers, has told the government it believes regulators should crack down on the common practice of audit partners leaving their firms to join clients.
In a response to consultation by the government on changes to the audit profession following the Enron affair, the ABI said firms should lose the audit contract if a partner moves to a senior position at a client.
‘We think there is a governance issue. The audit partner who becomes the finance director knows too much about where things can be hidden or where things are hidden,’ ABI head of of investment affairs, Peter Montagnon told the Financial Times.
He added concerns could come from the potential personal influence of the former partner over the remaining members of the engagement team.