The Pensions Investment and Research Council, which advises institutional clients controlling £300bn of investments, revealed its policy is to object to the reappointment of all accountancy firms who earn more from consultancy than audit in the same company.
PIRC this week told clients to vote against the reappointment of Deloittes at Railtrack and last week KPMG at Cable & Wireless.
Railtrack was expecting a rough ride from investors at its agm which kicked off at 11am today (Tuesday) with the Deloitte’s role under particular attack because of its larger consultancy earnings.
PIRC, which has 60 institutional clients, has maintained pressure on auditors since it began giving advice in 1992.
Stuart Bell of PIRC said: ‘We think there is a problem for the integrity of the audit process if there are other commercial relationships.’
He said PIRC would always advised against the reappointment of an auditor if they were earning between 25% and 100% more in non-audit, or consultancy, services from the same company.
Earlier, Railtrack chairman John Robinson said: ‘Railtrack has had a terrible year.
‘There have been the crashes and I sympathise deeply with the families of the bereaved and injured.
‘But we have also had bad performance,’ he said.
‘Despite all the efforts that have gone in, the performance of the railways is still significantly short of where we want to be.’
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