MPs to grill Big Four CEOs in audit inquiry
28 Jan 2019
The heads of the Big Four audit firms and their mid-tier challengers are to face questions from MPs on Wednesday, 30 January, when the Business, Energy and Industrial Strategy (BEIS) select committee holds the second evidence session for its inquiry into the future of audit
28 Jan 2019
First up at 10am are the mid-tier firms, with Grant Thornton CEO David Dunckley, Paul Eagland, managing partner, BDO, Clive Stevens, chairman, Association of Practicing Accountants, and Jac Berry, UK head of quality and risk, Mazars, all scheduled to appear.
From approximately 11am it will be the turn of the UK heads of the Big Four accountancy firms - PwC, Deloitte, EY and KPMG, to face a grilling from MPs.
David Sproul, senior partner and CEO, Deloitte UK, Steve Varley, chairman, EY UK, Bill Michael, UK chairman and senior partner of KPMG, and Kevin Ellis, chairman and senior partner, PwC UK, will all give evidence.
The audit inquiry was launched following earlier BEIS committee inquiries into the collapse of Carillion and BHS, which identified flaws in the auditing of those companies and raised concerns about the role and relationship of auditors to large companies.
The committee has said its objective is to explore the recommendations of the recent Competition and Markets Authority (CMA) study of the audit market and Sir John Kingman’s review of the Financial Reporting Council (FRC) in improving quality and competition in the audit market and reducing conflicts of interest. It will also look at the recently announced review into the quality and effectiveness of the UK audit market being led by Sir Donald Brydon.
Rachel Reeves, chair of the BEIS committee, said: ‘A series of corporate failures at businesses such as BHS, Carillion and Patisserie Valerie have highlighted glaring weaknesses in audit.
‘The overwhelming market dominance of the Big Four also raises serious competition concerns.
‘In Wednesday’s hearing, we will want to test the Big Four’s plans to fix the market and explore whether “challenger” firms are ready to step up and stage a breakthrough in conducting audits at our biggest companies.’
The first session of the inquiry, held on 23 January, heard evidence from Steve Barber, the AA audit committee chair, Margaret Ewing, nomination, audit and risk chair at ITV, and Sir John Kingman, chair of the independent review of the FRC.
At future hearings, the committee will be questioning Sir Donald Brydon, and representatives from the FRC and the ICAEW, and a government minister.
BEIS Future of Audit session, 10am 30 January, will be available on Parliament TV here: https://parliamentlive.tv/Event/Index/6829d379-d193-4db2-8ad2-17830685dd5c
Report by Pat Sweet