§ Mr. WigginTo ask the Secretary of State for Trade and Industry what progress the joint DTI-Treasury chaired group has made on the(a) analysis and (b) response to the auditing and accounting issues raised by recent corporate failures. [73737]
§ Miss Melanie JohnsonThe Co-ordinating Group on Audit and Accounting Issues published an Interim Report on 24 July. Copies of the Report were placed in the Libraries of the House.
My right hon. Friend, the Secretary of State for Trade and Industry, welcomed the report in a Statement on the same day. In response to a recommendation in the Interim Report, she announced that there would be an immediate review of the regulation of the audit and accountancy professions in the UK. The Terms of Reference for that Review have now been published and are as set out below:
To review the current arrangements for the regulation of the accountancy and audit professions; to consider whether revised arrangements and structures are necessary to provide assurance to the public that these are effective; and, if so, to recommend what form they should take.In particular, the review should look at:
the regulatory functions that are necessary in the public interest, and how they should be carried out, including desirable simplificationthe balance between professional self regulation and independent regulation in carrying out these functions; and the extent to which these should be on a statutory basisthe case for taking a different approach to the regulation of the accountancy profession in general and to the regulation of auditors in particular697Wthe funding arrangements and in particular whether these are consistent with the concept of independent regulationthe responsibilities and accountabilities of the various bodies, including the process of making appointmentsIn considering these issues, the review should also have regard to:the principles of good regulation established by the Better Regulation Task Forceinternational developments, especially in the United States and the European Unionthe requirements of the 8 EU Company Law Directive and the Companies Act 1989 on the regulation of auditorsthe relationship between these arrangements and the work of the Financial Reporting Council (FRC) and its subsidiary bodies, and the responsibilities of the Financial Services Authority in relation to listed companies.the other work being carried out following the interim report by the Coordinating Group on Accounting and Audit, and the Secretary of State's Statement to Parliament of 24 July 2002.The review should report by January 2003.