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Big Four accountancy firms 'too close to company bosses'
The Competition Commission's report on how KPMG, PwC, Ernst & Young and Deloitte audit 90% of businesses is due
David Feeney - The Guardian, Friday 22 February 2013
 http://www.guardian.co.uk/business/2013/feb/22/big-four-competition-commission-report
The bosses of Britain's largest companies are too close to the "Big Four" accountancy firms which carry out the overwhelming majority of audits, a report is expected to say on Friday.
The Competition Commission's review into how KPMG, PwC, Ernst & Young and Deloitte audit 90% of UK-listed blue chip businesses is expected to say that while it found no evidence of collusion between them, there is a restricted amount of competition.
It is expected to attack the cosy relationship between auditors and senior management at City firms, who are often alumni of the Big Four themselves.
High-ranking members of Big Four firms also sit on many company boards.
It will reportedly not seek the break up of these firms – which also provide a wide range of non-audit services to their clients – but suggest measures to reduce their stranglehold over the UK's largest firms, including a ban on "Big Four-only" clauses in loan documents from banks and giving shareholders a greater say in the choice of auditors.
Firms could also be ordered to rotate between auditors and invite other firms to tender for work on their accounts.
The investigation, ordered in 2011, was partly prompted by a House of Lords inquiry which found that listed companies, which must have their annual reports signed off by an auditor, use the same accountant for an average of 48 years, a figure the Big Four dispute.
The fear is that auditors become less sceptical over time about what clients tell them.
There was also anger that accountants gave banks a clean bill of health just before taxpayers had to rescue them during the financial crisis....


Criticism as SEVEN watchdog members set to investigate KPMG are revealed as current and former employees
By James Salmon - PUBLISHED: 22:38, 19 April 2013 | UPDATED: 22:38, 19 April 2013
 http://www.thisismoney.co.uk/money/news/article-2311821/Criticism-SEVEN-watchdog-members-set-investigate-KPMG-revealed-current-employees.html?ito=feeds-newsxml
Seven senior members of the watchdog braced to investigate KPMG’s role in the collapse of lender HBOS are current or former employees of the accounting giant.
The revelations have raised fresh questions over the independence of the Financial Reporting Council (FRC). It is poised to investigate KPMG if a separate report into HBOS’s downfall uncovers evidence that the accountant failed to vet HBOS’s finances properly.
KPMG signed off HBOS’s decision to set aside just £370million for bad loans to firms in the summer of 2008. Lloyds, which rescued HBOS, went on to rack up £46billion of losses from loans made by its corporate division................


The fallout from last week's report also continued to engulf the auditor KPMG, whose reputation was dealt another blow when the accounting regulator confirmed that it was considering investigating the Big Four accountant's audit of HBOS in the lead-up to the bank's collapse.
KPMG suffered its third major setback in less than 24 hours, having already been forced to resign as auditor of Herbalife and Sketchers in the US following an insider trading scandal.
The Financial Reporting Council said it was "monitoring the situation closely". The watchdog said it would take a final decision once a separate report on HBOS by the Financial Conduct Authority was published later this year. In response KPMG said: "We stand by the quality of our audit work at HBOS."
 http://www.independent.co.uk/news/business/news/number-10-turns-up-pressure-on-hornby-over-hbos-8567969.html

Such is the role of this volunteer 'management consultant' whose role at the council has been shrouded in secrecy since Ferguson agreed to buy KPMG's former 'concrete cancer' headquarters opposite Templar Meads