New audit laws: Preventing conflict of interest

Earlier this week the banks launched an organisation that would “change the culture” of how they do business and treat customers.

Though very welcome, it requires a wide-eyed optimism to envision real change.

Later in the week the Public Accounts Committee suggested there was a “gross conflict of interest” for consultants PwC who were involved in the National Children’s Hospital in both design and review.

In the public’s perception, both issues represent the same thing — the ugly, greedy side of capitalism.

Britain’s Competition and Markets Authority (CMA) recognised this yesterday when dealing with book-keeping failures such as at construction company Carillion and BHS.

CMA said Britain’s “Big Four” accounting firms must ringfence auditing from consultancy work.

Britain’s business minister Greg Clark has said he would legislate to implement the CMA’s proposals, which represent the most vigorous challenge to auditors yet and come after a series of failed efforts to marshal the Big Four.

No need for us to reinvent the wheel so.