Speaking in the wake of news that the SEC has launched an inquiry into US audit firms after PricewaterhoueCoopers was exposed as an abuser of share ownership rules, Glaxo Wellcome FD John Coombe said he did not believe UK auditors directly held shares in companies which were audit clients.
But he urged firms to ensure that pension funds to which retired partners belonged did not hold shares in client firms.
‘My view is that certainly in general there is a pretty good separation here – certainly in our own case,’ he said. ‘But as explained to us by PwC a lot of the problems here are with retired partners’ retirement plans which do have shares in client companies.’
He added: ‘While clearly it shouldn’t happen – and we are very pleased to see firms are taking responsibility to put their house in order – we are not too worried that there is any misdoing.
‘There has to be a clear separation of duty and responsibility and I would express some surprise that firms whose job it is to ensure they apply rules of governance and care are themselves caught out by these rules.’
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