FRC called to take over audit forum

Investors have claimed the ICAEW is the wrong place for decision-making on the future of auditors’ liability, and insisted that the recently formed Audit Quality Forum be removed and placed under the umbrella of the Financial Reporting Council.

The disquiet over the AQF came from Michael McKersie, manager of investment affairs at the Association of British Insurers, who told Accountancy Age that decisions of such magnitude should not be made at the institute.

He wants the AQF moved away from the institute to provide a greater show of the forum’s independence, and to establish greater authority for its decision-making.

‘It can’t be the ICAEW that decides what the ultimate answer on the issues should be,’ said McKersie, adding that there needed to be a move ‘away from these feelings of vested interest’.

He suggested that the FRC would be viewed as a much more independent place for such discussions to take place, and would have the necessary weight to decide on when and how these answers should be implemented.

The AQF was established under the wing of the ICAEW to find agreement between investors and auditors on changes to the profession, before the government would push forward with legislation to establish proportionate liability protection from catastrophic compensation claims. Support among accountants for McKersie’s position is thin on the ground.

‘The whole point of the AQF has been missed by those wanting it under the FRC’ said Peter Wyman, head of professional affairs at PricewaterhouseCoopers.

Steve Maslin, head of assurance at Grant Thornton, said the forum was an ‘excellent way to get interested parties talking’ and its position at the ICAEW allowed investors in particular to be more open in their viewpoints.

Paul Boyle, chief executive of the FRC, said that the forum was fine if viewed as a think-tank consisting of ‘a self-selecting group of enthusiasts’, but that some investors had raised their concerns about the forum.