§ Mr. Austin MitchellTo ask the President of the Board of Trade how many auditing firms are registered with each of the recognised supervisory bodies.
§ Mr. Neil HamiltonThe number of auditing firms—including sole practitioners—registered as eligible for appointment as company auditor under the rules of each of the recognised supervisory bodies on 27 October is shown in the table.
Supervisory body Number of registered firms Institute of Chartered Accountants in England and Wales 9,225 Institute of Chartered Accountants of Scotland 730 Institute of Chartered Accountants of Ireland 344 Chartered Association of Certified Accountants 5,859 Association of Authorised Public Accountants 505
§ Mr. Austin MitchellTo ask the President of the Board of Trade if he will list the instances of audit failures which he has referred to the Institute of Chartered Accountants in England and Wales.
§ Mr. Neil HamiltonMy Department routinely refers to the Institute of Chartered Accountants in England and Wales complaints received, and reports from statutory investigations, on accounts that have been audited by auditors registered eligible for appointment as company auditors under the rules of the institute. Since the inception of the new regulatory regime for auditors under part II of the Companies Act 1989 on 1 October 1991, some 60 such cases have been referred. The most comon type of referral involved infringements of the accounting requirements of the Companies Act 1985 by small private companies. Most other complaints involved auditors' non-compliance with the auditing standard "The Audit Report" and auditors' provision of a special report that a company is entitled to the reporting exemptions available to small or medium-sized companies when the company was not in fact so entitled.
§ Mr. Austin MitchellTo ask the President of the Board of Trade if he will establish a body similar to the Dearing committee to investigate the setting of auditing standards in the United Kingdom.
§ Mr. Neil HamiltonNo.
§ Mr. Austin MitchellTo ask the President of the Board of Trade if he will list the names of auditing firms who have been criticised in his Department's reports relating to banks and insurance companies published since 1979.
§ Mr. Neil HamiltonSince 1979 there have been four published reports of investigations under the Companies 729W Act into the affairs of companies connected with banking and insurance which have included criticism of auditors as follows:
Company Auditor Ashbourne Investments Ltd. Wright Stevens and Lloyd Ramor Investments Ltd. Price Waterhouse Minet Holdings plc Black Geoghegan and Till Josolyne Layton-Bennett and Co. WMD Underwriting Agencies Ltd. Arthur Young McClelland Moores and Co. Alexander Howden Holdings plc de Paula Turner Laker and Co. Peat Marwick Mitchell and Co. Josolyne Layton-Bennett and Co. Arthur Young McClelland Moores and Co.
§ Mr. Austin MitchellTo ask the President of the Board of Trade if he will introduce proposals to prevent auditors of insurance companies from recruiting company directors.
§ Mr. Neil HamiltonI see no reason to do so. Ethical guidance issued by the professional accountancy bodies states that no one should take part in the audit of a company if he has, during the period on which the report is to be made or at any time in the two years prior to the first day of that period, been an officer—other than an auditor—or employee of that company. Under part II of the Companies Act 1989, recognised supervisory bodies are required to have adequate rules and practices as to professional integrity and independence.