FRC chair-designate calls on Big Four firms to improve the audits industry

Jan du Plessis, the chairman-designate of the Financial Reporting Council (FRC) has told the Big Four accountancy firms that “the outcome could be much worse for them” if they do not actively participate in the drive to improve the audit industry.

Mr du Plessis’ warning came as he faced questioning by MPs on the business select committee.

The audit sector has faced increased criticism in recent years after a series of high-profile corporate collapses at firms including Carillion and Patisserie Valerie.

Mr du Plessis is the UK Government’s favourite to lead to FRC. He told ministers that he would help to “jack up” the audit profession in Britain if he is appointed chairman of the regulator.

Mr du Plessis is a chartered accountant by training and is also the former chairman of BT. He was born in South Africa but holds British citizenship.

If MPs approve his appointment, Mr du Plessis will chair the FRC’s board for the next four years, The Times reports. 

The FRC is set to gain heightened powers and is being transformed into the Audit, Reporting and Governance Authority as part of a government overhaul of how the UK’s biggest audit companies are held accountable.

Mr Du Plessis said that the FRC was in a “pretty poor state” of governance and not having a chairman for almost two years was “really not the way to run the regulator that should be setting the tone for the whole of British business”.

He stated that he would deliver a “much stronger and better-governed FRC pretty quickly” should he be appointed and predicted that he could get the watchdog in “good shape…within two or three months”.

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