BusinessCompany NewsFunds call for audit disclosure

Funds call for audit disclosure

A leading investment fund manager has called for greater disclosure of the links between company directors and auditors in the wake of the Enron disaster.

Hermes, which has a formidable reputation for challenging company boards, said shareholders should be given much greater information about the inter-relationships between executives, non-executives and their auditors.

The comments renewed the debate on audit firm partners joining their clients’ board – Airtours, whose financial director was a former Andersen partner, this week faced demands to sack the embattled Big Five auditor.

Michelle Edkins, director of corporate governance at Hermes, said: ‘It is not wrong to appoint [former auditors] but it is important shareholders are confident there was the appropriate due process for making appointments to the board.’

The calls came as ICAEW president Michael Groom and UK senior partners from Deloitte & Touche, KPMG and PricewaterhouseCoopers all lobbied for improved global audit and accounting standards at the World Economic Forum meeting in New York.

Sir Howard Davies, chairman of the Financial Services Authority, said the US could learn from the UK’s regulatory environment.

Speaking to delegates at the conference, held at New York’s Waldorf Astoria Hotel, Sir Howard said: ‘The UK profession argues that the arrangements for the oversight of auditors and audit quality are somewhat more robust than those in the US.’

The FSA chief outlined options to combat threats to auditor independence, including the compulsory rotation of auditors and limits on non-audit work.

But he admitted it was still possible a scandal on the scale of Enron could happen in the UK.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor