FTSE 350 could avoid audit tendering process
House of Lords committee meeting hears that FTSE 350 companies could be exempt from mandatory audit rotation
FTSE 350 COMPANIES could avoid having to put audits out to tender and bank auditors will not be forced to discuss their clients with regulators, according to a House of Lords debate yesterday.
The House of Commons debate based on the Economic Affairs Committee report on auditors revealed that some MPs believe FTSE 350 companies should not be forced to put their audits out to tender but could be expected to voluntarily negotiate contracts every ten years.
It was also highlighted that auditors may not have to discuss their clients with regulators but instead meet with regulators twice a year as part of a code of practice.
“ACCA has been fully engaged with the audit debate at both UK and EU level and will continue to make the case that audit is key to both re-establishing trust and market confidence and to contributing to investor protection because it provides easily accessible, cost-effective and trustworthy information about the financial statements of companies,” said John Davies, head of technical, ACCA.
“The content of last night’s Lords debate shouldn’t really come as a surprise to anyone who’s been following the audit debate in the UK closely.
“The Lords might be concerned that the government haven’t fully supported their criticisms of the UK’s audit market, but really the government has steered a very reasonable course.”
Chairman of the Financial Reporting Council Baroness Hogg (pictured) said she did not support the break-up of the Big Four accountancy firms.
The audit market was referred to the Competition Commission last year following an investigation into the Big Four’s dominance by the Office of Fair Trading.