By Lucy White, Daily Mail, London (via TNS).
Britain’s accounting regulator has written to the industry’s largest firms asking them to stop their staff cheating in exams.
The Financial Reporting Council (FRC) said it was ‘deeply concerned’ by fines levied against the likes of EY, PwC and KPMG.
It is the latest blow for the audit industry, which has repeatedly been criticised for sloppiness and even outright misconduct.
Auditors are supposed to rubber-stamp companies’ accounts, so they can be trusted by employees, suppliers and shareholders – but their negligence and oversights have contributed to the collapse of firms such as Patisserie Valerie and outsourcer Carillion.
In a recent letter to chief executives, FRC executive director of supervision Sarah Rapson said the FRC had spoken to firms to understand 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 has asked the seven largest accountants – EY, PwC, KPMG, Deloitte, BDO, Grant Thornton and Mazars – to set out how they are presenting and detecting exam cheating. She cited a recent scandal where EY’s US arm was fined £84.5m for cheating on exams.
Rapson also mentioned cases where PwC’s Canadian branch was slapped with a £129,000 penalty for failing to prevent 1,200 staff gaming internal tests, and KPMG Australia was fined £257,000 for failures over internal training.
She has asked the likes of the Institute of Chartered Accountants in England and Wales to set out how it ensures exam integrity.
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