The Boardroom Blog

Grant Thornton recommends Murray Audit Firm Governance Code to investment community

Thursday, January 28, 2010 | Posted by: Grant Thornton
Categories: Governance | Tags: FRC, FTSE 350, governance, Murray, Audit Firm Governance Code, ICAEW

Grant Thornton UK LLP CEO Scott Barnes has welcomed the publication of the FRC and ICAEW’s Audit Firm Governance Code (the Code) as a positive step in promoting investor confidence in the auditing of listed companies, and promoting competition in the audit market.

That the ICAEW has collaborated on this code is another example of the profession getting onto the front foot in increasing confidence rather than sitting back and waiting for a problem to arise.

Confirming that Grant Thornton would take the necessary steps to comply with the full range of the Code’s provisions, Mr Barnes said:

“The Code builds on the publication of audit firm Transparency Reports and Audit Inspection Unit (AIU) Reports in increasing transparency and confidence in the listed audit market. Grant Thornton has always been to the fore in such developments, recognising that openness and transparency are cornerstones of quality.

“With the economy under pressure at this time, it is particularly important that the investment community has faith in the quality of listed company auditors and the statements they provide.

“Our practices are already in line with many of the Code’s provisions and we have already begun the process of recruiting independent non-executives with suitable experience and expertise who will bring a useful external market perspective.  The combination of independent non-executives and regular AIU reports provides investors with full confidence that Grant Thornton is delivering high quality work they can rely on.

“This is a very positive message which should be welcomed by UK PLC. It is a welcome development in the debate around confidence and the issues of audit firm concentration but it is only one element; investors and regulators also need to play their part by helping to remove the unfair barriers which reduce choice in the FTSE 350 audit market, in particular restrictive covenants imposed by many banks and funders.

“Lack of choice in the market arising out of these barriers is unhealthy, could damage quality and client service in the long run and poses a threat to the stability of capital markets, should one of the largest firms withdraw from the market suddenly”, Scott concluded.