No time for compromise

These include concerns about losing an audit contract, the desire to win more lucrative non-audit business and the development of close relationships between auditors and the management of their audit clients. The research, commissioned from MORI by the Accountancy Foundation’s Review Board, is evidence that audits are impaired by these factors and must certainly lead to an increased focus on what kind of reforms are required.

The old bugbears of audit rotation, compulsory competitive tendering for audit contracts, limits on non-audit services being supplied to an audit client must be dragged out of the closet and worked over.

The evidence suggests none of these solutions can be ruled out just yet. But the question on everybody’s lips will be about what to do next. First things first. All sides will have to be careful that this evidence is acknowledged in the government consultation paper on audit reform due out in the early part of next year.

Once there it is crucial the statistics and options for reform that follow are debated maturely and thoroughly.

There is always a risk that such issues can be brushed under the carpet by those who wield influence, but that cannot happen here. If these options for reform or the evidence is to be rejected, it must be for good reasons. If not, the loss of faith accountants continue to experience could prove terminal.

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