Big Four break-up? FRC calls for more competition after Carillion disaster
The UK's accountancy watchdog has said there must be more competition between accountancy firms..
The UK's accountancy watchdog has said there must be more competition between accountancy firms in the wake of the Carillion collapse.
Speaking to MPs this morning, Stephen Haddrill, chief executive of the Financial Reporting Council (FRC), said there should be "more competition in the major accounting and audit area".
Read more: Regulator warns Carillion rivals to watch the way they book their profits
KPMG has been the auditor of Carillion for 19 years, earning £30m in fees from the work. The FRC has now launched an investigation into the firm's audit.
Haddrill was forced to deny claims made by MPs that the FRC was "toothless". Rachel Reeves, chair of the Business, Energy and Industrial Strategy Select Committee, said investors were left in the dark about FRC's concerns over Carillion.
“Investors in a company have the right to know that you were actively monitoring a situation, presumably because you were concerned about it," she said.
"Why wasn't that information in the public domain? And why in the six months of actively monitoring – the most critical six months probably for that business in its short 19-year life – did nobody know you were actively monitoring?"
Haddrill said the FRC was unable to warn investors of its concern due to a confidentiality requirement that is built into legislation, and that the law in this area should be reviewed.
