Watchdog Says It Lacks Powers To Prevent Bad Audits

Law360, London (February 5, 2019, 6:15 PM GMT) -- The head of the U.K.'s independent auditing watchdog said Tuesday it lacked the powers and the budget to effectively defend against the auditing failures behind a recent string of major corporate bankruptcies, including the collapse of the Carillion PLC contracting group under a massive pension deficit.

Stephen Haddrill, chief executive of the Financial Reporting Council, told lawmakers that the chief disadvantage was the FRC's lack of ability to actively go through a company's books to test the accuracy of its accounting.

"We are able to ask a company a lot of questions," Haddrill told MPs. "What we don't have is the...

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