Deloitte & Touche came under pressure this week over its audit of Railtrack after a leading investment adviser spoke out against the reappointment of the firm as auditor, writes Gavin Hinks.
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 that earn more in consultancy than audit from a company.
PIRC this week told clients to vote against the reappointment of Deloittes at Railtrack and last week KPMG at Cable & Wireless.
Railtrack came under pressure at its agm on Tuesday over issues such as financial performance and safety. Seven people were hurt that day as a train hit the buffers at Waverley Station in Edinburgh (pictured).
Deloitte’s role came under particular attack because of its large consultancy earnings. The firm earned #0.5m in audit fees in 2000/2001, compared to #2.3m for non-audit work.
Stuart Bell of PIRC said: ‘We think there is a problem for the integrity of the audit process if there are other commercial relationships.’
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