FRC warn on audit rules

City A.M. Reporter
THE FINANCIAL Reporting Council (FRC) yesterday warned that forcing companies to rotate their accountants every few years could damage the quality of audits.

In a letter to the Competition Commission, which proposed the change, FRC chief executive Stephen Haddrill said the group “remains concerned that mandatory rotation could have an adverse effect on audit quality, artificially constraining businesses’ choice of audit firm”.

The FRC, the independent British corporate governance regulator, said firms should pursue a “comply or explain” approach to audit tendering which it says allows for more flexibility in developing the UK’s corporate governance.