ACCOUNTING REGULATORS came under fire in the House of Lord’s inquiry, and the committee called on the government to “impose a remedy” on the jostling organisations.
With six primary regulators of auditing and accounting in the UK, the Lords described their overseeing of the industry as “fragmented and unwieldy”, saying there is patent overlapping of jurisdiction and function.
One unified regulator was held up as the gold standard and the committee seemed to be calling for outside powers to swoop in and break up the squabbling crew.
Every attempt to merge the professional bodies has so far been rejected by members, and the Lords suggested this is proof of their inability to reach a common agreement.
The Financial Reporting Council has called for more powers and the Lords inquiry was in favour, saying this would make audit simpler and more streamlined.
First on the FRC’s wish list is an additional licence for auditors of listed companies, which would allow it to impose sanctions against individual practitioners.
The umbrella organisation wants to expand its disciplinary powers and right to conduct preliminary investigations when audits seem to be losing their way. Its justification for a stronger role lies with the Audit Inspection Unit, which claims too many investigations turn up substandard work in companies of major public interest.
The committee, led by Lord MacGrergor (pictured), said the impetus for change should come from regulators, but called on the government to take up the mantle “in the absence of rapid progress”.
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