PracticeAuditPwC chief wants client conversations public

PwC chief wants client conversations public

Big Four firm attempts to take lead in audit reform debate

Ian Powell

Lead PwC audit partners will ask their clients to divulge confidential
information in a move aimed at reforming the audit model in the wake of the
crisis.

Ian Powell, chairman of
PwC, told
an audience of 300 business professionals that the audit model needed reform,
and some internal discussions privately held between an auditor and company need
to be made public.

“It may well be that by making more of those discussions public, the value of
an audit can be collectively improved,” he said.

“I have asked our lead audit partners to discuss this idea with audit
committee chairs of PwC clients to see if we can work together on a voluntary
basis to improve the disclosure of such matters over the next reporting cycle.”

The comments come as the European Commission prepares to release a
green
paper
on audit competition, due later this month, and the House of
Lords prepares to hear evidence on the issue next week.

Powell is the second senior Big Four accountant to speak out on audit reform.
In June, John Griffith-Jones, senior partner at KPMG, said the audit model “is
long overdue [for] some serious market-wide discussion”.

There has been wide discussion in professional circles about the need for
audit reform. In April, Guy Jubb, investment director and head of corporate
governance
at Standard Life Investments, described the audit report as
“boilerplate of the highest order… riddled with get out of jail free clauses”.
In July, The ICAEW released a study which found that “insufficient information
is provided under the current framework about the work that underpins an audit”.

Powell said the audit profession had failed to explain “what audit is”.

“And if we don’t, then we can hardly complain if auditing is not well
understood,” he said.

Technical complexity and volume had grown in recent years at the expense of
comprehensibility.

“There is a need for better connectivity between governance, remuneration,
risk and sustainability information,” Powell added.

Further reading:

Audit:
time for change

Viva
la audit revolution

Investor
confronts auditors on reform

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