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'Big four' asked to separate audit work

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Last April, Britain’s Competition and Markets Authority (CMA) recommended the move to stop conflicts of interest at EY, KPMG, PwC and Deloitte, the ‘big four’ accountancy firms that dominate audits of major companies worldwide. Photo: Reuters

Last April, Britain’s Competition and Markets Authority (CMA) recommended the move to stop conflicts of interest at EY, KPMG, PwC and Deloitte, the ‘big four’ accountancy firms that dominate audits of major companies worldwide. Photo: Reuters

REUTERS

Last April, Britain’s Competition and Markets Authority (CMA) recommended the move to stop conflicts of interest at EY, KPMG, PwC and Deloitte, the ‘big four’ accountancy firms that dominate audits of major companies worldwide. Photo: Reuters

The UK's audit watchdog has asked the top seven accountancy firms to press ahead with separating the running of their audit and consultancy services without waiting for a change in the law.

The Financial Reporting Council (FRC) told the firms it wants operational separation to improve audit quality and market resilience.

Last April, Britain's Competition and Markets Authority (CMA) recommended the move to stop conflicts of interest at EY, KPMG, PwC and Deloitte, the 'big four' accountancy firms that dominate audits of major companies worldwide.

The FRC said Mazars, BDO and Grant Thornton were also sent a letter spelling out its expectations.

Regulators worry that firms could be tempted to go soft on audits to win more lucrative consultancy work. The CMA recommendation needs legislation to make it mandatory.

Reuters

Reuters