Withholding audit info should be criminal offence

Withholding audit info should be criminal offence

Audit Quality Forum looks into protecting audit quality by suggesting that third parties who fail to provide relevant audit information could be prosecuted.

Third parties withholding information to auditors could be prosecuted under
suggestions made by an ICAEW body.

The Audit Quality Forum has raised the issue of criminalising third parties,
who might include bankers, company directors and staff, and other creditors, to
highlight the importance of the groups to the quality of audits.

The suggestion will worry many who are already smarting from the introduction
of a ‘reckless auditing’ criminal offence in the Companies Act. The suggestion
may well be seen as another unnecessary burden on business.

Chair of the AQF working group Stephen Lewis, said: ‘The working group
believes that public policy makers need to be aware of the impact that third
parties could have on audit quality. One area that the working group suggests
may be worth considering is the possibility of introducing statutory duties on
third parties as regards the provision of information to auditors.

‘It could be possible to make it a criminal offence for third parties to lie
to auditors. However, public policy makers also need to be mindful of not
imposing unnecessary burdens on business in the process or of making third
parties reluctant to provide information at all.’

A copy of the paper can be found at
www.auditqualityforum.com.

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