Business Maverick: UK cleans up accounting sector with revamped audit rules

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The UK will bring in sweeping reforms aimed at the faltering audit regime to rein in the dominance of the Big Four accountancy firms, in an attempt to clean up the sector following a string of high-profile scandals.

The UK government said on Tuesday that it will replace the sector’s regulator, the Financial Reporting Council, with a new watchdog that will be given tougher enforcement powers and be funded by an industry levy.

The Audit, Reporting and Governance Authority will also have the ability to designate large private companies as “public interest entities” to ensure they are more transparent with investors. FTSE 350 firms will also need to conduct some of their audits with a challenger firm to PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young – to help nurture more competition.

 

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