Mario Christodoulou, Accountancy Age, Tuesday 29 June 2010 at 12:02:00

Bold new powers sought by financial regulator

The UK?s chief financial regulator is seeking bold new powers to fine,censure or disqualify audit firms.

A discussion paper released today proposes greater punitive measures for theFinancial Services Authority (FSA) following a scathing report which questionsauditor's independence in the lead up to the crisis.

The report raises concerns auditors failed to adequately scrutinisemanagement bias displaying "a worrying lack of scepticism".

The FSA said it now needs more ?enforcement powers to enable it to make afully calibrated response to the level of regulatory concern in any given case?.

It said it now wants to meet with auditors several times before year ends todiscuss potential issues. At present FSA officials meet auditors only once ayear.

The body also wants direct access to audit committees, within listedcompanies, to discuss audit issues.

Further reading:

FSAaccuse auditors of failing to question management bias