Sir David Tweedie, one of the world’s most prominent accountants, has added his voice to criticism of the decades-long relationships that bind auditors to the companies they are supposed to be vetting.
After 10 years overseeing accounting rules used in the European Union, Canada, Brazil, South Korea and other countries, Sir David becomes president of President of the Institute of Chartered Accountants of Scotland, a leading professional body, this month.
In an interview with the Financial Times, the former chairman of the International Accounting Standards Board criticised the estimated 48 years that a FTSE 100 auditor remains in place on average. “I think 48 years is pretty cosy,” he said.
In such long-term relationships, Sir David said he did not believe that the independence of auditors was sufficiently protected by rules requiring lead audit partners to be changed after several years.
“I don’t think the rotation of the partners hacks it, really. It has got to be more than that,” he said. – (Copyright The Financial Times Ltd 2012)