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Financial Reporting Council questioned on future of audit

04 February 2019

The Business, Energy and Industrial Strategy (BEIS) Committee hold two evidence hearings as they continue their inquiry into the future of audit.

On Monday 4th February (from 5pm), the BEIS Committee will question Sir Donald Brydon about his Independent Review of the Quality and Effectiveness of the UK Audit Market. Questions in Monday’s session are likely to focus on questions including how Sir Donald Brydon expects his review will dovetail with CMA and Kingman proposals and their implementation, issues around the ‘expectation gap’, concerns about audit quality, and questions around the purpose of audit.

On Tuesday 5th February (from 10am), the Committee will question a panel of witnesses including Stephen Haddrill, Chief Executive, Financial Reporting Council. In his recent review of the Financial Reporting Council (FRC), Sir John Kingman likened the FRC to a 'ramshackle house that leaks and creaks'. The session on Tuesday will examine questions around audit quality, and around the CMA and Kingman reviews, including proposals for a stronger regulator.

Accounting scandals

In the wake of accounting scandals at companies such as Carillion, BT, and Patisserie Valerie, the BEIS 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. The Committee is also considering the review into the quality and effectiveness of the UK audit market being led by Sir Donald Brydon.

Details of the final evidence hearing, with a Government Minister, will be announced in due course.

Witnesses

Monday 4 February 2019, Wilson Room, Portcullis House

At 5.15pm

  • Sir Donald Brydon, Chair of the Independent Review of the Quality and Effectiveness of the UK Audit Market

Tuesday 5 February 2019, Committee Room 5, Palace of Westminster

At 10am

  • Stephen Haddrill, Chief Executive, Financial Reporting Council
  • Michael Izza, Chief Executive, Institute of Chartered Accountants in England and Wales
  • Maggie McGhee, Executive Director, Governance, Association of Chartered Certified
    Accountants

Further information

Image: iStockphoto

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