§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if he will list the sections of the Companies Acts which relate to the selling by an auditor of non-auditing services to his audit clients.
§ Mr. RedwoodThe relevant provision in the Companies Act 1989 is paragraph 7(1) of schedule 11, which requires recognised supervisory bodies to have adequate rules and practices regarding the professional integrity and independence of company auditors. In addition, the Companies Act 1985 (Disclosure of Remuneration for 291W Non-Audit Work) Regulations 1991, made under section 390B of the Companies Act 1985, require companies that are not small or medium sized to disclose in their accounts the remuneration of their auditors and their associates for non-audit work for the company and its associated undertakings.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry what rules he has approved relating to the action which the recognised supervisory bodies are required to take in respect of auditing firms whose standards are found to be deficient.
§ Mr. RedwoodBefore recognising supervisory bodies for company auditors under part II of the Companies Act 1989, my right hon. Friend was satisfied that each had procedures for maintaining auditors' competence, adequate arrangements and resources for monitoring and enforcing compliance with its rules, effective arrangements for the investigation of complaints, and fair and reasonable rules and practices relating to membership, eligibility to accept appointments, and discipline.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry whether he will make it his policy to require the recognised supervisory bodies to publish the names of the firms found to have poor auditing standards.
§ Mr. RedwoodThe recognised supervisory bodies have undertaken to publish the names of auditors whose performance has been the subject of adverse disciplinary findings.