PracticeAuditNAO to be auditor of ‘last resort’

NAO to be auditor of 'last resort'

The National Audit Office could become the 'auditor of last resort' under a proposal put forward by a leading Liberal Democrat peer.

In an attempt to redress competition concerns among the large accountancy firms following the demise of Andersen, Lord Sharman, former international chairman of KPMG, has called for the financial watchdog to be allowed to audit public companies.

Writing in today’s Accountancy Age, Lord Sharman said such a move would provide greater competition and diminish the conflict of interest problem caused by the Big Four.

He said: ‘If nothing else this could provide an “auditor of last resort” in the same way as the Bank of England is a lender of last resort.’

When KPMG first published its own financial report, the firm asked the comptroller and auditor general, Sir John Bourn, to audit the results in a move to avoid the work being carried out by a rival.

According to Lord Sharman, Sir John expressed interest in the idea, but said at the time that such a proposal would require a change in legislation.

However, in his report ‘Holding to Account’, Sharman called for the NAO to be able to audit limited companies, a suggestion accepted by the government.

Click here to read Lord Sharman’s full article.

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