The Financial Times in January turned a routine letter from the Financial Reporting Council (FRC) to U.K. banks into a scandal, suggesting that it was an attempt to block U.S.-based Goldman Sachs from hiring a smaller accountancy firm in the U.K. to do part of its European audit, but allowing its existing auditor, PwC, to do the rest of it.
A spokesperson at the FRC, however, told Compliance Week that no concerns have been raised with the FRC regarding Goldman Sachs and that the Financial Times was wrong to have suggested this link.
Moreover, the letter is part of the FRC’s routine correspondence with audit firms over matters it expects them to consider in the performance of their duties. It is a straightforward reminder to audit firms of their requirement to act independently when performing their audit duties on subsidiary companies and not to automatically rely on assurances given by the group auditor.
Noting that a number of U.S....