LONDON (Reuters) – Britain’s accounting watchdog the Financial Reporting Council (FRC) has taken action to combat conflicts of interest at audit firms, after a string of scandals in the industry.
The FRC said on Tuesday that it was introducing a ban on all audit firms providing advice on recruitment and executive pay to auditing clients.
Auditors of large companies will have further restrictions on services they can provide to audit clients, limiting them to work that is closely linked to the audit itself or required by law, the FRC said.
Britain’s audit industry has been the subject of heavy criticism for failing to flag problems at builder Carillion and retailer BHS.
The new requirements are part of updated ethical and auditing standards issued by the FRC and will come into effect from March 15 next year.
Other requirements include greater transparency for audit fees.
(Reporting by Iain Withers, editing by Sinead Cruise)