Boss Of Audit Watchdog To Step Down Amid Investigation

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    Reportedly, Stephen Haddrill, the chief executive of the Financial Reporting Council (FRC), is set to step down amid a government investigation into the operations of the watchdog.

    Sky News reported that Haddrill is planning to leave within months. He has taken the lead at the FRC since 2009. The council monitors and regulates the audit sector.

    Sky cited an anonymous source when it said that Haddrill was anticipated to leave the company before the year ends.

    It is not known whether a replacement for Haddrill has yet been lined up. A spokesperson for FRC could not immediately be reached for requests for comment regarding the matter.

    This year, the FRC has been under intense examination as it faces an investigation that is backed by the government into its own operations. The probe is led by Sir John Kingman, the chairman of Legal & General, which is expected to report before the end of this year.

    Last May, the council was accused of “toothlessness” by MPs as part of a report into the collapse of Carillion, a construction giant. A report that was released by the joint parliamentary select committee accused it of having a “parasitical relationship” with the Big Four audit firms – EY, Deloitte, PricewaterhouseCoopers (PwC), and KPMG.

    Even as Kingman’s review has occurred, the FRC has tried to pre-empt some of the criticisms that it is likely to make.

    Earlier this October, it announced a review into its own operations to help in building trust, using measures that include new standards for determining risks, a review of auditing ethics, and heightened monitoring. It also floated the potential of banning companies from carrying out consultancy work for clients that they already audit.

    The FRC has been gradually ratcheting up its fines against companies who have been discovered to have executed auditing mistakes: earlier in 2018, it imposed a fine of £6.5 million– its biggest ever – against PwC, for the failures in the firm’s audit of BHS two years prior to the collapse of the department store.