Au­dit re­form needs to pick up the pace, min­is­ters told

The Daily Telegraph - Business - - Business - By Oliver Gill

‘Au­dit scan­dals high­light the need for the Gov­ern­ment to tackle this is­sue as a mat­ter of ur­gency’

FOOT-DRAG­GING over au­dit re­form needs to end or there will be more high pro­file cor­po­rate fail­ures like those at Thomas Cook, Car­il­lion and BHS, MPs have warned.

Min­is­ters must set out an ur­gent time frame for abol­ish­ing the Fi­nan­cial Re­port­ing Coun­cil (FRC) ac­count­ing watch­dog af­ter a re­port two years ago found it was not fit for pur­pose, the busi­ness se­lect com­mit­tee said.

City grandee Sir John King­man called for the FRC to be re­placed in an in­de­pen­dent study re­leased in De­cem­ber 2018, com­par­ing it to a “ram­shackle house”. But this has not yet hap­pened de­spite book­keep­ers re­peat­edly fail­ing to spot prob­lems at ma­jor com­pa­nies.

Travel agent Thomas Cook col­lapsed last year, strand­ing 150,000 Bri­tish tourists abroad and spark­ing a busi­ness com­mit­tee in­quiry, which raised ques­tions over the firm’s ac­counts and why auditors signed its fi­nances off.

Dar­ren Jones MP, com­mit­tee chair­man, said: “Au­dit scan­dals high­light the need for the Gov­ern­ment to tackle this is­sue as a mat­ter of ur­gency. At a time when busi­nesses are fac­ing tough trad­ing con­di­tions, it’s im­por­tant in­vestors and other stake­hold­ers can have con­fi­dence in au­dits.”

The Gov­ern­ment has said it is com­mit­ted to au­dit re­form.

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