MPs call for audit watchdog to reform after endorsing new chair Simon Dingemans
An influential committee of MPs has called for radical reforms from Britain’s accountancy watchdog after endorsing the appointment of its proposed new chair.
Parliament’s Business, Energy and Industrial Strategy Committee (Beis) has given its approval for Simon Dingemans to take over as chair of the Financial Reporting Council (FRC), but has urged the group to deliver a “tougher, more effective approach” to the UK’s audit sector.
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Dingemans, a former Glaxosmithkline finance chief and well-known M&A banker, has been the government’s preferred candidate to become chair after a tough spell for the watchdog, which is due to be revamped into a new body called the Audit, Reporting and Governance Authority.
The FRC has been stepping up its oversight of Britain’s auditors following criticism that it was too soft in the wake of auditing scandals such as the collapse of Carillion.
Last year the FRC pledged to “enhance” its supervision of the Big Four accountancy giants, laying out reforms to deal with what it admitted was the “underlying falling trust in business and the effectiveness of audit”.
Earlier this month the body said that every single one of Britain’s top beancounters had failed to pass audit quality tests for the second year in a row.
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“This is the most important pre-appointment hearing that the Committee has undertaken in this Parliament,” said Rachel Reeves who chairs the Beis committee.
She added: “Our inquiry on Carillion and on the future of audit highlighted in stark terms the weaknesses which exist in audit and the pressing need for a regulator which is independent, pro-active, and tough.
“We want the new Chair of the Financial Reporting Council to show the independence and challenge vital to deliver a regulator ready and willing to correct the problems in the audit sector.”
Earlier this month it emerged that the FRC has also hired the boss of HMRC, Jonathan Thompson, as its new chief executive to replace the outgoing Stephen Haddrill.