After a series of scandals, the major audit firms are in the sights of the British authorities.
The Financial Reporting Council (FRC), the UK's accounting regulator, has just castigated KPMG for its audits, despite several calls to order in previous years.
To read also:
Between revolt and loss of meaning, the young listeners of the “Big Four” question the profession
“
The 2020-2021 report shows that nearly a third of the audits inspected by the FRC need to be improved,
” writes the regulator. He voiced “
concerns about KPMG's bank audits
”.
“The progress compared to last year remains marginal and drastic changes are needed to substantially improve the quality of the audit,
” insists Jon Thompson, the managing director of the FRC. KPMG defended itself on Friday, assuring that it is already "
working hard to put in place the necessary changes underlined by the FRC
".
More generally, the regulator estimates that around a third of accounting audits in the United Kingdom are insufficient, pointing to BDO and Mazars.
“
High quality accounting audits are essential to maintain confidence in the UK financial markets
,
”
says Jon Thompson.
In February, Boris Johnson's government pledged to toughen the rules and reduce the power of the “big four” (Deloitte, EY, KPMG and PWC), to avoid conflicts of interest.
He has just completed a broad consultation aimed at instituting more extensive legislation.
In this context, the FRC should be replaced by a new body with enhanced powers.
