Top Appointments For Auditors Face Vetting
Carillion’s collapse has dominated business news for months. In February, we wrote of scrutiny towards some accountancy firms. The scrutiny focused on those who audited Carillion accounts. Various former Carillion employees worked for the ‘big 6’ auditors. Revealing this truth prompted questions. The news has prompted changes pulling in external involvement. New appointments for top financial firms now face an external vetting process.
FRC involvement
The financial Reporting Council (FRC) has stepped in. The FRC will have direct involvement in vetting all top appointments. The decision hopes to restore public confidence in auditors. As an external body, the FRC wants to avoid another Carillion.
During the Carillion collapse, KPMG found scrutiny for their involvement. KPGM approved Carillion’s 10 accounts mere months earlier. Following the collapse, news of Carillion’s auditors spread. Auditors on the accounts made for interesting reading. Numerous appointed auditors had formerly worked for Carillion. The situation shook public trust, with many creditors left with debts paid. Unable to pay their debts, Carillion entered liquidation.
The Carillion case study highlights the added need for transparency. The “big 6” accountancy firms hold a lot of power in UK business. This fact alone should prove the move to external help makes sense. The firms to be part of the new process include:
- KPMG
- Deloitte
- PwC
- EY
- Grant Thornton
- BDO
The FRC intends to become involved in the filling of ‘key leadership and governance roles’. The aim of the intervention is total transparency.
Melanie McLaren, Executive Director of Audit Regulation at the FRC spoke to the press of the move.
The work of the Big Six audit firms is core to the integrity and transparency of UK capital markets. It is vital that the FRC introduces a new approach. Where we don’t have specific powers, we will look for the firms' co-operation
Best for UK business
Numerous high profile companies have endured struggles in recent year; Toys R Us to Four Seasons, Maplin and others. For creditors, whispers of a company in trouble can cause concern. Numerous businesses suffered or went bust themselves due to liquidation of larger businesses. Due to Four Seasons failing to pay debts, other smaller businesses serving them struggled. Affected firms include staff agencies and commercial laundry companies.
The ‘big 6’ primarily audit the largest UK businesses. The financial safety of these large businesses will play a role in the UK economy. This is prominent for FTSE 100, 250 and 500 companies. Ensuring thorough audits without prejudice is good business practice. Proper auditing of large firms benefits the UK business and the economy.
Chasing non paying companies
If you have unpaid debts from large firms, you need to fight your corner. It is vitally important however to follow protocols. Following official proceedings is paramount in debt collection. Administrators have limited funds to provide creditors. To receive your payment you need to make your case for what your debt is worth. AYOM give you the best chance of recovering your money. We pride ourselves on expert mediation and years of experience.
We have the knowledge to help you from experience. Previous customers include firms involved with Carillion and Four Seasons. See our services page for information. To talk to us you can email enquiries@ayom.co.uk. You can call us weekdays on 0800 130 3357 Monday to Friday.