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Big 4 accountancy firms questioned on future of audit inquiry

30 January 2019

On Wednesday 30 January from 10am, the Business, Energy and Industrial Strategy (BEIS) Committee will question representatives of ‘challenger’ accountancy firms, including Grant Thornton, BDO, and Mazars, as part of their inquiry on the future of audit.

From approximately 11am, the UK heads of the Big Four accountancy firms – PWC, Deloitte, EY, and KPMG – will give evidence.

In the wake of accounting scandals at companies such as Carillion, BT, and Patisserie Valerie, the Committee is exploring the recommendations of the recent CMA study of the audit market and Sir John Kingman’s review of the Financial Reporting Council in improving quality and competition in the audit market and reducing conflicts of interest.

Chair's comments

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said:

"A series of corporate failures at businesses such as BHS, Carillion and Patisserie Valerie have highlighted glaring weaknesses in audit. The overwhelming market dominance of the Big 4 also raises serious competition concerns. In Wednesday’s hearing, we will want to test the Big 4’s plans to fix the market and explore whether ‘challenger’ firms are ready to step up and stage a breakthrough in conducting audits at our biggest companies."

Purpose of session

The Committee’s inquiry follows up on the Committee’s work on Carillion and BHS which identified flaws in the auditing of those companies and its subsequent interest in other auditing failures, such as Patisserie Valerie.  In addition to looking at the recent Kingman and CMA proposals, the Committee will also look at the recently announced review into the quality and effectiveness of the UK audit market being led by Sir Donald Brydon.

Future sessions: At future hearings, the Committee will be questioning Sir Donald Brydon, and representatives from the FRC & the ICAEW, and a Government Minister.

Witnesses

Wednesday 30 January, Thatcher Room, Portcullis House

At 10am

  • David Dunckley, Chief Executive Officer, Grant Thornton
  • Scott Knight, Head of Audit and Assurance, BDO
  • Clive Stevens, Chairman, Association of Practicing Accountants
  • Jac Berry, UK Head of Quality and Risk, Mazaars

At 11am

  • David Sproul, Senior Partner and Chief Executive Officer, Deloitte UK
  • Steve Varley, Chairman, EY UK
  • Bill Michael, UK Chairman and Senior Partner of KPMG
  • Kevin Ellis, Chairman and Senior Partner, PwC UK

Further information

Image: iStockphoto

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