Big firms bankroll fightback

The institute has admitted that the Big Five, as well as a number of Group A firms, have donated £40,000 to help collect evidence on auditor rotation and independence.

Defending the donation, deputy president Peter Wyman said: ‘We had to find the funding for a crisis that no one saw coming.’

Admitting the institute was ‘strapped for cash’, Wyman said the money would be used to pay for specific research projects, including a review of all published material relating to auditor rotation.

The analysis of the research would be carried out through the committee system of the institute and not by the firms themselves, he said.

But the move was condemned by institute councillors who raised the issue during the closed session of the last council meeting.

In an open letter to the deputy president, Douglas Llambias, chairman of the Business Exchange, said: ‘I consider that there is a real danger that the acceptance of £40,000 from the big four will be interpreted negatively.’

He added that the payment could be seen as having an influence on the institute’s policy of ‘no change, no knee-jerk policy’, a policy that supported the commercial objectives of the firms, he said.

Llambias called for an immediate independent review and open debate of the institute’s policies.

But Wyman claimed that all of his arguments had been based on existing institute policy.

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