UK: Auditor reform proposals less harsh than incoming EU rules

UK regulators’ revised proposals to regulate the auditing industry are not only less harsh than earlier plans, but are also less strict than those likely to be implemented by EU regulators.

The UK Competition Commission released revised plans Tuesday that would require companies to place their auditor roles up for tender once every 10 years, less frequently than the previous proposal that required a tender to go out every five years.

The move is part of the regulator’s efforts to boost competition within the auditing market, as the so-called Big Four accountancy groups largely dominate the sector and many companies wait decades to change their auditors.

The Commission is also looking to prevent a repeat of the financial crisis of 2007-2009, during which auditors gave banks positive reviews just before they had to be bailed out.

Reports say the UK’s reforms would go into effect in the last quarter of 2014.

While the plans earned some criticism, the European Commission is likely to put forward even stricter guidelines that would require companies to actually change their auditors on a regular basis.

Full Content: Reuters

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