New rules could see auditors clash publicly with their clients over the
explanations for resigning from an audit, because both parties will be compelled
to publish their reasons.
Lawyers have warned that the new rules, which come into effect on 1 April in
Act, will compel companies to report the circumstances of their auditor
stepping down to the audit authority and shareholders. Auditors will have to do
There is an increased chance that more sensitive information around
accounting conflicts could now be exposed.
Kathryn Cearns, consultant accountant at City law firm Herbert Smith, said
that, for the first time, companies will no longer have the option of whether to
report, and must report if the auditor resigns before the audit term is up.
She said, however, that auditors could feel compelled to reveal difficulties
in the relationship with the client, in case the issue arises in public after
the auditor has left.
‘If the auditor has missed something or doesn’t reveal circumstances of their
resignation in their statement, they may feel exposed if the company should run
into problems later, relating to their audits,’ Cearns said.
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season