FDs shun ‘Big Brother’ selection

Finance directors have said an emphatic ‘no’ to companies losing the right to appoint their auditors to an independent body.

Accountancy Age revealed last week that the Foundation watchdog is considering creating an independent body to appoint auditors. But this week’s Accountancy Age/Reed Accountancy Personnel’s Big Question shows 75% of finance directors want to retain the right to appoint their own auditors.

Trilogy Broadcast FD Sylvia Davis said: ‘The auditor supplies a service to the company so the company must have control to appoint different auditors if the service is not satisfactory or providing value for money.’

One FD believed strongly that ‘no way’ should a company’s auditor be appointed by an independent body. He added: ‘They would be better off making sure that those people who hold themselves out as auditors are registered and comply with standards.’

Another FD was adamant it ‘would cost too much’ to put an independent procedure in place. ‘It’s like Big Brother, it would be the government that would do it, so definitely not.’

Of more than 250 respondents, only 13% believed that it would ‘ensure independence’. Office Corp Furniture FD Mark Benfield backed the fundamental principle that shareholders should appoint auditors by majority vote.

But he said: ‘An independent board would be better placed to make the right decisions on behalf of shareholders, provided they negotiated fees fairly and employed a system of regular and frequent rotation.’

Related reading