FTSE100 audit committee chairs have questioned
the reasons behind the European Commissions (EC) audit reform
proposals, but agree some have merit, according to a research by
the Institute of Chartered Accountants in England and Wales (ICAEW)
and Brunswick Research.
The research of 25 FTSE100 audit committee
chairs found that there is no support in presumption that audits
helped accelerate or lead to the financial crisis.
An audit committee chair quoted anonymously
thinks the Green Paper is trying to “correct a wrong that doesn’t
exist”.
“I think that’s the bottom line here. We –
certainly in the UK – have a broadly sound system which
occasionally doesn’t perform quite as well as it should,” they
said.
Audit Committee chairs have however expressed
concern over the level of competition in the market and highlighted
the continuing focus and reassurance on auditor independence and
greater use of third party and peer review of audit practices as
some of the areas needing improvement.
ICAEW chief executive Michael Izza said when considering their
proposals, the EC cannot ignore the voice of business.
“As this research shows there is scepticism
over the rationale for these proposals but recognition that change
is needed in a number of areas to ensure UK audit quality remains
world leading,” Izza said.
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By GlobalDataThe Audit committee chairs also called for
more transparency around audit but warned it should be balanced
with the requirement to protect commercial sensitivities.
