The next man to face the full persuasive wrath of the Big Four will be Norman Murray, chairman of Cairn Energy and the ICAS-qualified braveheart chosen by the FRC to write a governance code for auditors
This will be no easy task, not least because the subject of non-executive
director equivalents and all manner of corporate governance issues are bound to
crop up annoyingly for the firms.
Murray will have to stand his ground, however, not least because the code
(which will no doubt be known as the Murray Code) is one part of the many
measures designed by the FRC to level the playing field between the Big Four and
the rest of the audit community.
What’s next? Murray will draw up a work programme and then he will be
inundated with meetings where every imaginable argument will be made to convince
him that, actually, a code for audit need not be a radical thing. The most
common argument he’ll face is that ‘we’re already doing most of what you ask
for’.
So Murray will have to be tough. Having said that, he currently has a
colleague (Cairn’s finance director Jann Brown) who is only too willing to let
auditors know where to get off. Last year she was reported in Accountancy Age as
not being overly impressed with the company’s auditors, Ernst & Young, over
their advice on IFRS.
Brown won’t appreciate the reprise of this incident, but it demonstrates a
tough mindedness that Murray will have to employ himself at times. It’s
difficult to imagine, given his background in private equity, that he could be
anything else.
Still, the job won’t be easy. There’s no love lost between the regulator and
the big firms, and Murray could be seen as an FRC place man sent in to rough
them up. The new code should make interesting reading.
Gavin Hinks is editor of Accountancy Age