Mid-tier firm calls for auditor restrictions

In a hard-hitting report, RSM Robson Rhodes has called on the newly established Accountancy Foundation to set out clear boundaries on non-audit work that could be provided to clients.

In addition, the firm argued that all significant non-audit work should have to be approved by a company's audit committee, backed by a full analysis published in its annual report.

The report, Asserting Independence, said: 'There is real concern about the extent to which auditors are selling other services to their clients and that this can stop them being tough when toughness is needed.'

The move will be seen as a challenge to the accountancy profession, in particular the ICAEW, which is currently debating its policy on independence and the rotation of audit firms. Robson Rhodes called for a company's audit to be put out to tender at least once every five years.

The firm's technical partner, Anthony Carey, who until recently was technical director at the ICAEW, said: 'To avoid another Enron, we need a governance system that prevents problems rather than one that corrects them.'

See also:

Merger activity likely in mid-tier

Mid-tier firms are being urged to step into the big league and take on the large firms as concerns grow over the lack of audit competition. Such a move could see a spate of mergers, as firms respond to the changed competitive environment.  10 Jul 2002

Treasury could back auditor rotation

The Treasury could force companies to switch auditors every seven years under reforms that could also prevent auditors selling consultancy advice to their clients.  01 Jul 2002

Questions asked of ICAEW recommendations

It's six months since the collapse of Enron and the ICAEW has just issued far-reaching recommendations with the aim of restoring confidence in the profession.  21 Jun 2002

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