Criticising the role auditor Coopers & Lybrand Deloitte played in the collapse of Maxwell’s corrupt media empire, the Department of Trade and Industry’s report says that the same person should not be responsible for an audit of a listed company for more than a given number of years.
This is so that ‘a fresh and objective view is regularly undertaken’.
According to the report, this could be achieved either by the compulsory rotation of audit partners, or of audit firms, and it refers to an EU consultative paper on the issue.
It also calls for ‘more radical thought and wider debate in the UK on the issues of auditor independence and detailed consideration of the rules being promulgated by the US Securities and Exchange Commission and the consultation paper issued by the EU Commission’.
£10m Maxwell report slams auditors
Timeline: The Maxwell scandal