LONDON - Britain's accounting watchdog proposed on Wednesday that auditors publish indicators of how well they are performing in a bid to raise standards after a string of corporate failures.
The collapse of builder Carillion, retailer BHS and cafe chain Patisserie Valerie threw a spotlight on audit quality, prompting the government to propose a string of reforms, but there was no firm legislative timetable.
The Financial Reporting Council is stepping up pressure on auditors using the powers it already has, focusing on EY, PwC, Deloitte and KPMG, dubbed the Big Four, which audited 94% of the 350 biggest listed companies in 2020.
"The 11 proposed audit quality indicators (AQIs) would provide stakeholders with a range of comparable indicators on perceived culture within an audit firm, audit quality inspection results, staff workloads, and the level of partners’ involvement in individual audits," the FRC said in a statement.
"We propose to also develop a methodological/guidance note to ensure firms describe and measure their AQIs in the same way – we will offer firms the chance to cooperate on developing this guidance after publication of the feedback statement towards the end of 2022."