• Register
Return to: Home > News > BEIS to launch inquiry into UK audit market

BEIS to launch inquiry into UK audit market

The Business, Energy and Industrial Strategy Committee (BEIS) plans to launch an inquiry into the UK audit market in 2019.

In a speech delivered at The Institute of Chartered Accountants in England and Wales headquarters on Monday, chair of BEIS Rachel Reeves said that the inquiry will follow the publication of the Kingman review and Competition and Markets Authority investigation.

Reeves said that the inquiry will consist of public hearings involving the Big Four, audit committee chairs, regulators and other stakeholders.

In her speech, Reeves was critical of both regulators and auditors. She said: “Some people tell me that if you break up the Big 4 or give more work to the smaller firms, quality will suffer. That would be a fair argument, if the quality of audits today were good or outstanding. They are not.”

She commented on her lack of confidence in the UK’s Financial Reporting Council (FRC): “My impression is that the FRC has for too long been going for the quiet word over G&Ts in City watering holes, when it should have been shouting from the rooftops about unacceptable performance and imposing effective sanctions.

“Carillion is only the latest example of a toothless regulator who was asleep on the job. Or co-opted by the industry it is supposed to regulate. The FRC has been far too passive, too timid, and too close to the firms it regulates.”

The lack of the competition in the audit market has been the focus of political and public criticisms over the last year. However, Reeves noted that increasing competition would not necessarily increase the quality of audit.

She said: “There is no safe reason to assume that handing over to another auditor will resolve the problem. Only recently, the scandalous mismanagement of Patisserie Valerie – a firm reliant on Grant Thornton – showed how much we would be deceiving ourselves if we thought the solution were that simple.”

Top Content

    South Africa: sensing new opportunities

    It has been an interesting couple of years for the profession in South Africa. A number of high-profile scandals have brought the profession and the role of auditors into sharp public focus, brewing a distrust towards accountants and a large expectations gap. Joe Pickard reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.