It has been a long few weeks for the big four accountancy and audit firms as speculation grows as to whether the government is still considering a move to split their respective audit and advisory roles and impose fee structures.
Firms have long resisted any suggestion that there may be a conflict in the sharing of profit pools between those two distinct areas.
It is certainly the case that there has been criticism in recent time over the quality of some audits in the wake of accounting scandals such as Carillion and Patisserie Valerie.
It was some time ago that the CMA waded in and suggested the big four be split up and forced to work with smaller mid and lower tier firms. Those calls have been reinvigorated recently and now the FRC is suggesting that it gets a centralised power to set auditor pay.
I strongly suspect that this is an issue that will escalate in the coming months, especially if a power is awarded to the regulator to clawback partners bonuses.
Watch this space ...
If the largest accountancy firms are obliged to split their audit practice from their advisory, the FRC will reportedly ask the government for the power to set auditors’ pay.