Companies bill drags audit oversight out of the shadows

The amendment opens up the
Professional Oversight
, the inspection unit of the Financial Reporting Council, to the
Freedom of Information Act.

The POB does not name audit firms or companies it has inspected and publishes
results of inspections only in the form of a general report.

Director of the POB Paul George immediately reacted with scepticism. ‘We’re
not convinced the bill is the right mechanism to determine whether a body should
be subject to the FOI,’ he said.

A combined Tory, Liberal Democrat and cross-bench vote supported the
provision proposed by Tory spokeswoman Baroness Noakes.

She protested that audit quality reports on the work of major accountancy
firms would otherwise continue to remain private, with the publication of ‘only
the blandest summaries, despite the requirement under corporate governance rules
for the audit committees of company boards to make judgments about the
effectiveness of their auditors’.

Baroness Noakes said it was ‘extraordinary’ that audit committees were being
denied access to reports, which would improve their decision-making and urged
the POB to move voluntarily ‘in the direction of transparency’.

Trade and industry minister Lord Sainsbury said that even under the Act ‘it
is by no means certain that all reports [would become] available.’

‘I hope this will all result in the POB recognising that the Freedom of
Information Act does exist,’ Baroness Noakes told Accountancy Age.

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