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Audit Firms Told to Appoint Non-Execs

Global Glimpses | January 25, 2010

Big U.K. audit firms will have to involve independent non-executive directors in their decision-making processes for the first time under a new code aimed at improving their corporate governance practices.

Core aims of the code are to boost investor confidence in the quality of listed-company audit work and reduce the risk of a big accounting firm going bust or pulling out of the audit market.

Deloitte, KPMG, PricewaterhouseCoopers, and Ernst & Young said they were looking at ways of appointing non-executive directors. BDO, the U.K.’s fifth-largest firm, appointed two independent non-executives to its U.K. practice over a year ago.

The code says the non-executives have a duty of care to the audit firm that appoints them, but adds: “They should command...

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