The UK Communities and Local Government
Committee (CLGC) has called for the government to prevent a Big
Four audit firm taking over the Audit Commission’s audit
practice.
CLGC chair Clive Betts said as the Audit
Commission is soon to be abolished government must help its audit
practice to become a stand-alone body and retain its skilled
staff.
“In a crowded market already dominated by too
few players, we favour the establishment of a stand-alone company,
preferably a mutual [company],” Betts explained.
The CLGC also called for the government to
create “adequate legal safeguards and to help local government
establish capable and independent local audit committees” after a
proposal to abolish public body rights to appoint their own
auditors.
“Ministers and the National Audit Office must
move rapidly to establish a new audit framework for local
government in the future that is effective, efficient and robust,”
Betts said.
Last August, Department of Communities and
Local Government secretary Eric Pickles revealed the Audit
Commission will close by 2012 saving the government £50m ($80.2m) a
year.
The Audit Commission has been the regulator,
commissioner and major provider of local government audit services,
undertaking 70% of local government audit and commissioning the
remaining 30% to five audit firms.
Under the changes proposed, local government
will appoint their own auditors through independent audit
committees, and some Audit Commission functions, such as the
responsibility for drawing up the scope of audit, will be passed on
to the National Audit Office.
The DCLG has issued a consultation document on
the future of public sector audit work and a draft bill is expected
to be issued later this year.
Related link
Parliament Commons Select Committee announcement on audit
