British accounting sector faces the most strict regimen after the radical proposals of the competition watchdog.
British Competition and Markets Authority made a proposal indicating that big companies should work with two accounting firms, one of which is outside the Big 4- KPMG, Deloitte, PwC and EY.
The proposal came as a result of an independent investigation to remove the ‘weak’ regulator of the accounting sector- Financial Reporting Council (FRC).
The Council is thought to have too ‘’close’’ relations with the companies of whom it is the regulator.
The proposal is aimed at helping the smaller accounting firms have access to the bigger clients so that they can extend their experiences and credibility.
Other proposals of the Authority were as follows;
-to seperate the audit and counseling services within the Big 4,
-to closely examine the auditor appointments and regulatory investigations of the management.
KPMG, EY, Deloitte and PwC have recently been criticized to focus more on the profit than making regular examinations for the firms they are the auditor of. The Big were criticized for not detecting the problems of the construction company Carillion which had some troubles in January.
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