HC Deb 12 March 1990 vol 169 cc42-3W
Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry if he will introduce legislation to amend the Companies Acts to direct all large companies to disclose exit values of their assets.

Mr. Redwood

I assume that the hon. Member is referring to disclosure of net realisable values. I am not persuaded that the burdens that such a general requirement would impose on companies would be justified.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry if he will introduce legislation to amend the Companies Acts to place upon company auditors the same duties for reporting fraud which are conferred upon auditors auditing businesses covered by the Financial Services Act.

Mr. Redwood

No. The Financial Services Act does not impose a duty upon auditors to report suspected fraud It removes any obstacles there may be to an auditor reporting relevant matters to the regulatory authorities. This provision goes substantially beyond fraud and reflects the special features of the regulatory regime. In the case of companies in general, whether or not an auditor should report suspected fraud to management, the members of the company, or to third parties depends on the circumstances, as is explained in the newly published auditing guideline on the auditor's responsibility in relation to fraud, other irregularities and errors.

Mr. Austin Mitchell

To ask the Secretary of State for Trade and Industry if he will introduce legislation to require auditors of all large companies to examine the chairman's report.

Mr. Redwood

No. Auditing guidelines already recommend auditors to review financial information in the chairman's report where it is published as part of, or in conjunction with, the annual report.