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Regulators to face audit inquiry

TWO CITY regulators will face the House of Lords economic affairs committee which is investigating the role audit played in the lead up to the crisis.

Regulators are likely to express concern at auditors’ lack of professional scepticism when they meet the Lords’ committee tomorrow.

It will come at a time when the European Commission is seeking to bring in dramatic new regulations aimed at promoting competition and expanding the role of audit.

Richard Thorpe Financial Services AuthorityStephen Haddrill, chief executive at the Financial Reporting Council (FRC), and Richard Thorpe (pictured) from the Financial Services Authority will attend. Both bodies have previously raised concerns about auditors’ “worrying lack of scepticism” in reports published earlier in the year.

The broad inquiry is investigating the lack of competition at the top end of the industry along with the role accounting standards played in the crisis.

Baroness Hogg, a former member of the Economic Affairs Committee, will also attend in her present role as chairman of the FRC.

The inquiry last week heard from the Institute of Chartered Accountants in Australia who said its national system of proportional liability had  limited effect on promoting competition.

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