David Bishop, currently a consultant at KPMG, last week told the Treasury select committee that capital markets had lost confidence in the audit profession. He said: ‘We have alot to worry about; the confidence of the capital markets has been damaged, as has the confidence in audit.’
Bishop, who famously came up with proposals to rationalise the number of institutes serving UK accountants in the early 1990s, made his remarks at the first meeting of the select committee’s investigation into financial regulation following the collapse of Enron and demise of Andersen. He was speaking on behalf of ACCA where he is a council member.
Attacking the perceived complacency in the UK over auditing, he said: ‘We need a cold hard look at where we are now … it would be wrong to say “if it ain’t broke, don’t fix it”.’
Bishop was part of a six-strong panel facing the select committee, which is chaired by Labour MP John McFall.
The panel also included representatives from CIMA and the ICAEW. Peter Wyman, president-elect of the ICAEW argued there was a strong need to investigate auditors’ independence. He said: ‘We have to recognise the loss of confidence, and that confidence needs to be restored.’
Conservative MP Michael Fallon, called for restrictions on auditors working for clients – some Andersen employees switched to Enron prior to its collapse.
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