US lawmakers have overwhelmingly voted against a controversial proposal that would have forced companies to switch accountants every few years.
The PCAOB and regulators have argued that requiring companies to change auditors routinely would help break up the cosy relationships between businesses and their accountants. Many auditors were criticised for failing to report weaknesses in companies’ financial statements in the run-up to the financial crisis.
The PCAOB proposal was met with heavy criticism and lobbying from the accounting and financial industry, which said there was little evidence that switching auditors would help prevent future scandals.
Accounting firms including PwC, KPMG and Deloitte & Touche, as well as some of their clients, including Lloyds Banking Group and Royal Bank of Scotland, have voiced opposition to the PCAOB initiative or a similar regulatory project in Europe.
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