HC Deb 06 March 1990 vol 168 cc584-5W
Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry whether he will seek to amend the Companies Act 1989 so as to require the supervisory bodies to ascertain whether or not an auditor has received more than 15 per cent. of his income from one client.

Mr. Redwood

No. Under the Act the Secretary of State may recognise a supervisory body only if, among other things, it appears to him that it has adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules. Such arrangements would need to cover any rules that required company auditors to observe the body's guidance on the proportion of income which they may receive from any one client.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry if he will bring forward legislation to prevent individuals criticised by his Department's inspectors from acting as auditors for companies.

Mr. Redwood

No, but under part II of the Companies Act 1989, the Secretary of State may not recognise a supervisory body unless it appears to him that it has adequate rules and practices designed to ensure that company auditors are fit and proper persons for appointment.