§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if she will bring forward legislation preventing auditors from selling tax avoidance schemes to their audit clients. [146534]
§ Mr. SutcliffeNo. The Government concluded in January 2003, in the light of the Report of the Coordinating Group on Audit and Accounting Issues, that standards on auditor independence, including on the provision of non-audit services to audit clients, should be set by the Auditing Practices Board (APB). The Government invited the APB to look in particular at the provision of a number of non-audit services including taxation services. Following this, the APB published a consultation paper, "Draft Ethical Standards for Auditors", in November 2003. Paragraphs 4.40 to 4.52 of the consultation paper and paragraphs 51 to 66 of draft Ethical Standard 5 address the provision of tax services by audit firms to their audit clients. In addition, the revised Combined Code on Corporate Governance, published by the Financial Reporting Council in July 2003, places on the audit committee in a listed company responsibility for developing and implementing policy on the engagement of the external auditor to supply non-audit services.