This is not the time to break up audit firms
In an ideal world there would be more than four big firms of auditors. But breaking up the quartet to produce an extra firm or two would be anything but ideal in the current world.
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The Edge
Richard Northedge takes on corporate finance
Archive for the ‘Audit’ category
Marks and Spencer Group will now say it only once
Marks and Spencer Group Plc (LON:MKS) has admitted it: shareholders can have too much information. It will tell them (or let them find out for themselves) that there is no great gain in having a trading statement then releasing full figures for the same period a month later.
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Despite delays, a common US-UK accounting standard is still worthwhile
The US and UK are two countries divided by their accounting language. It is still an objective of both nations to adopt compatible accounting standards but the failure of one or both countries to compromise means the 2011 deadline is likely to be missed – or fudged.
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The problem with annual reports being published online
The problem with making annual reports available only on the internet is that when companies get into trouble, so do their websites. If companies really object to the cost of posting out accounts they should cut out the publicity and propaganda in the printed versions.
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Lloyd’s mustn’t become the government’s “bad bank”
Lloyd’s TSB’s takeover of HBoS was a mistake but it would be another error to force it to undo the deal. If the Independent Banking Commission recommends demerger it would be creating a “good bank”, “bad bank” regime at the shareholders’ expense.
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Moving UKLA is an excuse to build a corporate super-regulator
We know the government hates the Financial Services Authority, but is it trying to create a powerful new corporate regulator by stealth? By handing the supervision of listings to the Financial Reporting Council it is building a huge new monitoring body.
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Listing agency will make FRC yet more powerful
The Financial Services Authority will not only lose bank supervision under the government’s shake-up of regulation, it is likely to lose its role monitoring listed companies. And the winner will be the Financial Reporting Council, making this little-known body the country’s most powerful corporate regulator.
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Watchdog must be careful with Ernst & Young
The accounting watchdog has ordered Ernst & Young to explain its role in how Lehman Brothers hid $50bn of debts, but the regulator has a conflict. It is trying to increase the choice of audit firms so cannot do anything that reduces the current Big Four to just three.
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The Big Four audit firms must get smaller
Top of the in-tray for Lady Hogg, the new chairman of the Financial Reporting Council (FRC), should be how to increase auditor choice. Four big accounting firms is not enough, even if another one does not disappear.
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