Some audit partners are retiring early over fears that they might be subject to regulatory scrutiny from the UK’s audit watchdog, a major accounting body has cautioned.
“It can have negative consequences for your career if there is any deficit in the audit work you’ve done,” Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, told The Sunday Times.
“Some of those people who are retiring over 50 are making a conscious decision to retire because they are managing their risk,” Izza added.
The UK’s accounting watchdog, the Financial Reporting Council (FRC), issued a record £46.5m in fines over the past year – more than triple the amount on the previous year – following a series of high-profile accounting scandals.
The FRC, however, pushed back against the suggestion that increased regulatory scrutiny was encouraging partners to step down sooner than expected.
“We would be surprised that any audit professional would be planning their career on the basis of fearing regulatory fines or sanctions. If individual auditors are doing high-quality work supported by firms with adequate resources, they should have no concerns,” a spokesperson for the Financial Reporting Council told The Sunday Times.
The comments come as the sector goes on a hiring spree, with Big Four firm Deloitte announcing last week that it was looking to hire 6,000 audit and assurance staff over the next five years.