Scandal-stricken accountants face tougher rules as watchdog unveils proposals to improve board accountability and independence
Britain’s accounting watchdog has unveiled proposals to step up audits following a string of scandals across the sector.
The Financial Reporting Council (FRC) launched a consultation on rule changes that would cause a stir at the so-called Big Four bean counters.
It wants to amend the Governance Code for accountancy firms to improve the accountability and independence of the board of directors at EY, KPMG, PwC and Deloitte.
Crackdown: The Financial Reporting Council (FRC) launched a consultation on rule changes that would force a stir at the so-called Big Four bean counters
All those companies have been slammed with multimillion-pound fines for shoddy audits in recent years.
Some of these mistakes have cost shareholders, staff and even the government billions of pounds.
One of the key changes to the code is that the chairman of the board will be separated from the senior partner or chief executive positions.
This would help clarify the role of boards of directors in holding management accountable, the FRC said.
Mark Babington, FRC’s Executive Director of Regulatory Standards, said: “These proposals will provide a springboard for further progress in improving audit quality and market resilience.”
Responses to the consultation must be sent by November 18.