The UK Financial Reporting Council’s
high-level Audit Inspection Unit (AIU) reports on seven major UK
firms are due to be released publicly for the first time this
December and while one UK mid-tier leader has expressed fears they
lead to greater economic uncertainty, others have welcome the

Grant Thornton UK chief executive Michael Cleary said any
criticism of an accounting firm by the AIU needs to be considered
in the context of good audit quality overall.

“At this critical point of time in the economic position of the
country, the danger is that the AIU reports may be misinterpreted
and there’s so much uncertainty that any criticism of auditors may
be taken out of all context [due to the credit crunch],” Cleary

Commentators have suggested that firm-specific reports would
better serve the public interest and point to the US Public Company
Accounting Oversight Board, which publishes select parts of its
reports on individual audit firms.

RSM Bentley Jennison national managing partner Tony Stockdale
warned if changes are delivered in a way that is negative, rather
than a positive, it won’t have a beneficial effect.

PKF senior partner Ian Mills said that while he supported an
increase in transparency, the reports “distort the playing field
when you are comparing firms that are [inspected] with ones who
aren’t [inspected] because regulation only affects the top tier of
the profession”.

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BDO Stoy Hayward managing partner Simon Michaels has welcomed
the move.

“[The reports] allow audit committees to take more informed
decisions about auditor appointments. It gives end users greater
confidence and enhances the reputation of the profession more
generally, he said.

Nicholas Moody