Leaked paper reveals FRC proposed audit demergers

Leaked paper reveals FRC proposed audit demergers

Accounting regulator drew up analysis of the impact of forcing the Big Four to spin off their audit arms

frc logo

The Financial Reporting Council is said
to have drawn up, and now rejected, a plan to force the Big Four to spin off
their audit arms.

The FT says this morning that is has seen a
draft document outlining the implications of a proposal to force the big firms
to demerge their audit functions, created as part of the Market Participants’
Group’s discussions.

The paper cites two sources saying that the idea has been dropped. The leak
of the spin-off idea has surprised observers, since the secrecy of the group’s
discussions has been insisted on by all parties.

The regulator is reported to have said that spin-offs could be an effective
way of widening choice, the impact on quality was unknown and that the move
would come at a small but not intolerable cost.

FRC chief exeucitve Paul Boyle said: ‘Until the MPG has a chance to comment
it would be unsafe to assume any of these proposals will see the light of day.
They’re not official policy.’

Further reading:

FRC
faces £1.4m Mayflower crunch

Competition and Choice:
limited options

Overview: audit competition
debate

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource