FRC tells 'Big Four' accountants to split accounting and auditing operations
Regulators have told the UK's 'Big Four' accounting firms that by June 2024 they must separate their accounting and auditing arms.
In a further move, the Financial Reporting Council also told Deloitte, EY, KPMG and PwC to fence off their auditors and to draw up plans to improve their profession by October.
Included among the latter were measures to shield auditors from pressure emanating from other parts of their same firms.
Monday's moves from the UK's watchdog for accountants, auditors and actuaries were motivated by the recent collapse of government contractor Carillion and retailer BHS.
Indeed, such had been the outcry that there had even been calls for the Big Four consultants to be broken up.
FRC chief executive, Sir Jon Thompson, said: "Operational separation of audit practices is one element of the FRC’s strategy to improve the quality and effectiveness of corporate reporting and audit in the UK following the Kingman, CMA and Brydon reviews.
"Today the FRC has delivered a major step in the reform of the audit sector by setting principles for operational separation of audit practices from the rest of the firm."