PracticeAuditFirms ‘may involve lawyers’ in audit reports

Firms 'may involve lawyers' in audit reports

Regulator admits auditor report process may mean legal teams are employed by firms, as with the US's PCAOB

Firms ‘may involve their lawyers’ in the run-up to the publication of
individual reports on audit firms, the regulator admitted this week.

The Audit Inspection Unit is expecting the publication process to take longer
and is budgeting for more costs as a result of the planned moves.

AIU director Andrew Jones said: ‘The view is that critical comments will not
be viewed in the context of all the other positive work a firm is doing. The
firms might well involve their lawyers.

‘We expect it to result in additional time by firms and ourselves but that
depends on the firms. If it is approached positively then the degree of delay is
minimal,’ Jones said.

US reports, which are
not
as wide-ranging
as those planned by the UK watchdog, regularly
involve legal wranglings.

Big Four figures in the UK have pointed out that the FSA does not publish its
dicsussions with banks for fear of a run on the bank. But it is thought that
since companies have not unduly suffered when their auditors have been slated in
the US, the fears were unwarranted where UK auditors were concerned.

The AIU’s consultation on the moves said the body was budgeting for an extra
£125,000 for the extra costs associated with individual firm reports, and an
extra £375,000 for the individual audit by audit reports, which will be sent to
firms and which they can share with clients but will not be published.

Further Reading:

Regulators poised to publish
audit firms’ shortcomings

Pressure mounts to name
names

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