PwC shakes up audit practice as regulators circle<\/p>\n<\/p>\n
The plan, PwC announced on Wednesday, has three key areas: additional investment in training, people and technology. Namely, the new audit arm will be strengthened by hiring an additional 500 experienced auditors. <\/p>\n
PwC\u2019s audit overhaul comes after a slew of high profile blunders at Carillion<\/a>, BHS<\/a>, and HBOS, to name a choice few. No member of the Big Four has emerged from these past few torrid years with their reputation unharmed.<\/p>\n Criticism of the big four firms has become increasingly intense. PwC, in particular, was on the receiving end of perhaps the most incendiary of the criticism to date.<\/p>\n After Carillion\u2019s spectacular collapse, Frank Field, chair of the work and pensions committee, singled out PwC, stating that it \u201cmanaged to play all three sides \u2013 the company, pension schemes, and the Government \u2013 to the tune of \u00a321m\u201d and \u201care now being paid to preside over the carcass of the company as Special Managers\u201d.<\/p>\n PwC was also the auditors implicated in the sorry saga of BHS. Its external audit on the 2013-2014 accounts of the now collapsed retailer drew record \u00a310m fine from the FRC, dwarfing the previous record of \u00a35.1m (also held by PwC for its audit of RSM Tenon).<\/p>\n But PwC is far from the only Big Four firm\u00a0to be caught up in controversy. EY, Deloitte, and KPMG have had their share of scandal, too and the widespread nature of the audit failures prompted the Competition and Markets Authority (CMA) propose an operational split between audit and non-audit work.<\/p>\n PwC\u2019s split can perhaps be seen as an attempt to get ahead of any prospective shake-up. \u201cOver the last year, we have been listening to the views of a wide range of stakeholders about the future of audit \u2013 exploring how it needs to change to meet society\u2019s evolving expectations,\u201d stated Hermione Hudson, PwC\u2019s head of audit.<\/p>\n \u201cGiven the important role that auditing plays in the modern economy, everyone that relies on audit work needs to have the same high level of confidence in its transparency, objectivity, and effectiveness.\u201d<\/p>\n As part of the reform package, PwC will double the amount of time its auditors spend in face-to-face training programmes annually and increase the number of specialists in its audit quality control team by two-thirds.<\/p>\n The firm has also drafted in Karthik Ramanna, professor of business at the University of Oxford\u2019s Blavatnik School of Government and longtime critic of the audit industry, to write a paper on \u201cwhat a culture of challenge means for auditors in 2019\u201d.<\/p>\n \u201cIt seems a bit weird,\u201d said Robert Stell, director of Rise Audit, reacting to PwC\u2019s measures. \u201cAre they are going to retrain their audit teams to think differently?<\/p>\n \u201cIt\u2019s obvious the Big Four are motivated to do something to stop it being forced upon them. But they\u2019ve got to change the culture and that\u2019s a real root and branch operation. PwC\u2019s changes sound a little like an attempt to put some measures in that\u2019ll satisfy any government body that\u2019ll come along and change things.<\/p>\n \u201cIt sounds like tinkering and not fundamental change and it\u2019s also shifting the blame down to the lower levels. The problem has been at the highest level.\u201d<\/p>\n<\/p><\/div>\n \u00a0<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" PwC shakes up audit practice as regulators circle PwC is investing \u00a330m to revamp its scandal stricken statutory audit practice, including a bold proposal to split its audit practice into external and internal auditing teams. The plan, PwC announced on Wednesday, has three key areas: additional investment in training, people and technology. Namely, the new audit arm will be strengthened […]<\/p>\n","protected":false},"author":2,"featured_media":5773,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[25],"tags":[],"_links":{"self":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3827"}],"collection":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/comments?post=3827"}],"version-history":[{"count":0,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media\/5773"}],"wp:attachment":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media?parent=3827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/categories?post=3827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/tags?post=3827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}