Bank audit firms could be restricted from other services

Bank auditors may face tougher restrictions on offering non-audit services,
according to a report looking into the banking crisis.

The Commons Treasury committee recommends that auditors be banned from
undertaking non-audit work for financial institution clients, the Financial
Times reported.

Even after auditors were reined in following the collapse of Enron in 2001,
they are able to provide certain types of tax advice, due diligence and
assurance over systems and controls.

The auditors of Britain’s biggest banks have been paid big fees for non-audit
work. PwC, auditor of Barclays and Lloyds, earned £20 million from these two
banks for non-audit services, out of a total bill of £71.5 million.

Auditors say they failed to understand why MPs have come to these conclusions
and said they operated within existing law.

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