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Under-pressure FRC steps up oversight of big auditors after beefing up fines

The accounting watchdog is pushing on with its promise to get tough on Britain's six biggest auditfirms following criticism that it is too soft.
The under-pressureFinancial Reporting Council (FRC), which has beencriticised for letting major accountants off the hook, said on Tuesday that it would "enhance" its monitoring of the companies and review those in line for certain jobs in the industry.
Candidates fora board, head of audit or ethics role at KPMG, Deloitte, PwC, EY, Grant Thornton and BDO would be assessed by the regulator, it said,as the firms face areputational crisisfollowing astring of scandals.
The FRC said it wantedtolimit "risks of systematic deficiencies" thatcouldaffect stability in the financial sector.
The announcement comes a day after it said thatserious breaches would land the Big Four fines of ?10m or more fromJune this year. The Big Four -KPMG, Deloitte, PwC and EY - currentlyhandle around 99pc of all FTSE 100 audits and 96pcof FTSE 250 audits.
The extra scrutiny comes as publictrustin the sector dwindles, with the collapse of construction giant Carillion raising questions over the roleits auditorsplayed. In the decade leading up to its collapse,the Big Four raked inmore than ?71min fees from the construction firm.
MPs have since calledfor the biggest accounting giants to be broken up after failing to spot the warning signs at Carillion andfeasting on what was soon to become a carcass.
Business secretary Greg Clark piled further pressure on the industry watchdog at a select committee hearing earlier this year when he said: "I think we should look at the operation of the FRC to see whether there are changes that are required."
Under-pressure FRC steps up oversight of big auditors after beefing up fines

The collapse of construction giant Carillion raised questions over the roleits auditorsplayed in the decade leading up to its collapse
Former KPMG partner Richard Fleming, who now covers European restructuring for Alvarez& Marsal, saidthe FRC's recent push to get tough was"long overdue".
Smaller rivals are hoping to benefit from the extra scrutiny, with one former Big Four accountant telling The Telegraph that his firm hadnoticed a significant uptick in CVs in recent months.
However there are also fears among specialist advisers that if the accounting giants are broken up, this would lead to more competition in the restructuring and advisory sectors.
The FRChas already startedmonitoring areas such as risk reporting, contingency planning and IT security and will report those findings back to the companies.
"The work of the Big Six audit firms is core to the integrity and transparency of UK capital markets and so it is vital that the FRC introduces a new approach to monitoring their stability and performance," said FRC directorMelanie McLaren.
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