The head of the UK’s accounting watchdog has said Britain’s major auditors should stop “complaining” about fines and start improving the quality of their work instead.
In an interview with the Financial Times, Financial Reporting Council (FRC) chief executive Sir Jon Thompson said “the solution” to auditors’ problems with fines is “entirely” in their own hands. “Do a good audit and you don’t get in trouble with us,” the FRC chief said.
The watchdog chief’s comments come after the FRC last month reported that it had hit the UK’s major auditors with a record £46.5m worth of fines over the previous year, following a series of high-profile accounting scandals.
The record sum came as the watchdog last month hit Big Four auditor KPMG with a record £14.4m fine, following revelations its auditors misled FRC investigators during spot inspections of KPMG’s audits of collapsed construction contractor Carillion and outsourcing company Regenersis.
The FRC chief executive said the watchdog will also continue to prioritise audit quality over boosting competition in the sector. The comments comes as the regulator has issued a series of fines against smaller accounting firms over the previous, including a £2m fine against Grant Thornton over its audit of Sports Direct.
“We’re going to have to make some choices about what’s more important. And to be frank about it, our board’s view is that audit quality is more important at the minute,” Thompson said to the FT.