PracticeAuditStop paying for non-audit work: PIRC

Stop paying for non-audit work: PIRC

Research body warns about conflict of interest

Some of the nation’s largest companies are being urged to stop hiring their
audit company for non-audit work.

The PIRC, an independent research and advisory consultancy for institutional
investors, warned large companies to stop paying for non-audit services, arguing
that it stymies truly independent judgments,
The
Times
reports
.

Their research found that FTSE All-Share companies forked out large sums for
non-audit work with the biggest spenders including Salamander Energy, Ashmore
Group, Berkeley Group, William Hill and Premier Foods, as well as FTSE 100
property consultancy Land Securities.

Last month, KPMG’s successful bid for the audit of corporate services firm
Rentokil, using a package which combined some internal and external audit
functions, sparked debate with concerns the arrangement could skirt ethical
guidelines.

The company said it consulted widely before taking the job and were confident
the arrangement was in the spirit and letter of the law.

The move led some in the industry to question whether KPMG may be skirting
ethical boundaries by using the controversial arrangement which would be
prohibited under US laws and could be challenged in France.

Further reading:

IIA warns audit firms of ‘conflict
of interest’

Debate rages on over KPMG’s
cut-price Rentokil audit deal

Auditors
face fees backlash

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