Mario Christodoulou, Accountancy Age, Thursday 13 May 2010 at 16:08:00

FRC releases report on firms' transparency

The UK?s reporting regulator has asked the UK's largest accounting firms tocompete on quality, according to a report released moments ago.

The Financial Reporting Council (FRC) has released its review of audit firms?transparency reports, brought in to make audit firms more transparent abouttheir internal systems and revenues.

The council said while it was pleased with the overall standard of reports,there remained ?limited evidence of firms attempting to distinguish betweenthemselves, and hence compete, on quality?.

?Although this year?s reports were in general of higher quality than thevoluntary reports looked at previously, very few reports met all of therequirements,? the council said.

?There were also a number of common themes emerging, in particular, we wouldlike firms to improve the quality of their disclosures in ?internationalnetworks, independence issues; and financial information.?

The board urged the firms to consider ?more objective measures of theeffectiveness of their systems of quality control, for example by includingdetail on their key performance indicators, and their internal assessments ofperformance against these KPIs in future reports?.

Further reading:Auditquality under pressure as firms cut costs