ICAEW U-turn over audit replacement.
Concerns rise after council members withdraw support for independent
A surprise ICAEW council decision to withdraw support for the independent professional review has sparked concerns among those who think the idea should be considered, writes Michelle Perry.
The institute had supported DTI proposals to replace the audit for small companies with the lighter-weight assurance until last Wednesday when council member Stella Fearnley proposed a motion leading to a U-turn.
Under plans to update company law, a DTI working party last year proposed the IPR as an alternative assurance following the audit threshold hike to #1m, and plans to raise it higher.
Fearnley, a Portsmouth Business School professor, raised concerns over the liabilities auditors could face as well as slating the IPR as ‘conceptually flawed’ and ‘confusing to the British public’.
Baroness Noakes, former institute president, opposed the IPR. She added: ‘I was surprised to see the Auditing Practices Board is doing field tests.’ The APB said it will forge ahead with the research, with results expected in spring.
But, the council’s move has been met with disappointment from some. Daniella Stewart, member of the Company Law Review taskforce said: ‘This is an about-face with nothing new having happened apart from the research starting.’
Jonathan Becklegge, ACCA’s head of audit, said: ‘The IPR deserves a chance. We are supporting it, in that we’d rather see the results than make a knee-jerk reaction.’
Opinion page 16, letters page 17.