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Auditing Standards

Volume 175: debated on Monday 25 June 1990

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To ask the Secretary of State for Trade and Industry whether he will create a body, independent of the auditing industry, to formulate auditing standards.

To ask the Secretary of State for Trade and Industry whether he will legislate to ban auditing firms from writing up the board minutes of companies and then auditing the same.

I see no reason to do so. Under existing legislation, a person who is an officer of a company—or a partner or employee of an officer—is prohibited from being appointed as auditor of the company. Moreover, under the Companies Act 1989 the Secretary of State will be able to recognise a supervisory body for auditors only if the body appears to him to have adequate rules and practices designed to ensure that company audit work is conducted properly and with integrity, and that persons are not appointed as company auditors in circumstances in which they have any interest likely to conflict with the proper conduct of the audit.