Sunday 28 October 2018 10:34 am | Updated: Tuesday 21 May 2019 4:21 pm

Audit watchdog boss Stephen Haddrill set to step down amid probe

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The chief executive of the Financial Reporting Council (FRC), Stephen Haddrill, is reportedly preparing to step down amid a government probe into the watchdog’s operations.

Haddrill is planning to leave within months, Sky News reported. He has led the FRC, which monitors and regulates the audit sector, since 2009.

Citing an anonymous source, Sky said Haddrill was expected to leave before the end of the year.

It is not known whether a replacement has yet been lined up. An FRC spokesperson could not immediately be reached for comment.

The FRC has been under intense scrutiny this year, as it faces a government-backed investigation into its own operations, led by Legal & General chairman Sir John Kingman, which is expected to report before the end of this year.

It was accused of “toothlessness” by MPs in May, as part of a report into the collapse of construction giant Carillion. A joint parliamentary select committee report accused it of having a “parasitical relationship” with the Big Four audit firms – Deloitte, EY, KPMG and PricewaterhouseCoopers (PwC).

Even as Kingman’s review has taken place, the FRC has attempted to pre-empt some of the criticisms it is likely to make.

Earlier this month, it announced a review into its own operations to help build trust, using measures including heightened monitoring, new standards for determining risks and a review of auditing ethics. It also floated the possibility of banning firms from carrying out consultancy work for clients they already audit.

The FRC has been gradually ratcheting up its fines against firms found to have made auditing mistakes: earlier this year, it levied a £6.5m fine – its biggest ever – against PwC, for failures in the firm’s audit of BHS two years before the department store collapsed.