Low fees could spell end of Audit Commission work by big firms
Large accountancy firms may stop working for the Audit Commission because the fees are too low, according to the chief executive designate of CIPFA, Stephen Freer.
Giving evidence at a House of Commons select committee Freer said some firms may follow the example of Ernst & Young and withdraw from the Audit Commission market.
But he added not all firms saw the Commission in the same way.’It’s quite clear that some very big firms have stayed in the market. The reasons for that maybe various. They find great advantages because of the high prestige it brings.’
Freer was answering questions during a meeting of the Environment sub-committee that is hearing evidence on the work of the Audit Commission.
Last week Tory MP David Davis, chairman of the influential Public Accounts Committee, proposed the Commission should no longer report to the Department of Environment but should instead report direct to MPs in a specially formed select committee.
This time evidence was heard of concerns about the cost, number and quality of Commission audits.
Matthew Warburton, head of strategy at the Local Government Association, and Gordon Keymer, a member of the body’s executive, both said local authorities complained about the cost of Commission inspections, and that it might become more expensive once Best Value comes into place.
Warburton also said authorities were worried the quality of Commission work was threatened by using ‘junior staff’.
Lesley Halton, borough treasurer with West Devon Borough Council, said the market for auditing local authorities should be opened up to allow competition and hopefully bring down the cost.
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