City veterans join Kingman inquiry into future of FRC
THE Government has picked a team of City big-hitters to lead an inquiry into the UK’S audit watchdog just days after a damning report into the collapse of Carillion pointed to major failures in the market.
Former Treasury official Sir John Kingman, the chairman of Legal & General, was chosen to lead the investigation into the Financial Reporting Council (FRC) last month, following accusations that it was “toothless” and “useless” by MPS.
A string of City veterans including Anne Richards, who runs fund group M&G, Nikhil Rathi, the London Stock Exchange’s UK chief, Mark Burgess, the deputy chief investment officer of Columbia Threadneedle, and Simon Fraser, chairman of F&C Investment Trust, have been chosen to support the landmark inquiry.
Others on the 11-person panel include Sir Peter Gershon, the chairman of National Grid, Dame Amelia Fawcett, a non-executive director at the Treasury, and Dame Mary Keegan, Pwc’s first female audit partner.
They will be tasked with deciding whether the under-pressure regulator’s governance, impact and powers are “fit for the future”. The FRC is trying to toughen up after being criticised for letting major accountants off the hook. Last year, it cleared KPMG over its work with HBOS just before it had to be rescued during the financial crisis.
The experts’ names have emerged days after MPS released a scathing report into the downfall of construction giant Carillion that claimed the UK audit market was a “cosy club incapable of providing the degree of independent challenge needed”. The report argued that KPMG’S “long and complacent” run of audits at Carillion was not a one-off blip.
Speaking to The Daily Telegraph in March, the under-fire firms argued that the job of an audit was to check the figures were “true and fair” rather than giving a clean bill of health. “We’re not crystal ball gazers,” said KPMG’S UK chairman Bill Michael.
The inquiry into the FRC is due to be completed at the end of this year.