Britain’s accountancy regulator is writing to the industry’s biggest firms to stop their staff cheating in exams
Britain’s accountancy regulator has written to the industry’s biggest firms to stop their staff cheating in exams.
The Financial Reporting Council (FRC) said it was “deeply concerned” by the fines imposed on companies such as EY, PwC and KPMG.
It is the latest blow to the audit industry, which has been repeatedly criticized for negligence and even outright misconduct.
Concern: The Financial Reporting Council said it was “deeply concerned” by the fines imposed on the likes of EY, PwC and KPMG
Auditors are supposed to certify companies’ accounts so they can be trusted by employees, suppliers and shareholders, but their negligence and oversights contributed to the collapse of firms such as Patisserie Valerie and outsourcing firm Carillion.
In a recent letter to regulators, the FRC’s executive director of supervision, Sarah Rapson, said the FRC had spoken to firms to understand what controls they had in place.
She said: “Given the importance of this issue, we have decided that we need to formalise, deepen and accelerate these discussions.”
Rapson asked seven of the biggest accountancy firms – EY, PwC, KPMG, Deloitte, BDO, Grant Thornton and Mazars – to explain how they represent and detect cheating in exams. She cited the recent scandal where EY’s US arm was fined £84.5m for exam cheating.
Rapson also cited cases where PwC’s Canadian arm was fined £129,000 for failing to prevent internal tests on 1,200 staff and KPMG Australia was fined £257,000 for breaching internal training.
She asked the Institute of Chartered Accountants in England and Wales to explain how this would ensure the integrity of the exams.