Further memorandum submitted by HM Treasury
COMMITTEE INQUIRY INTO THE FINANCIAL REGULATION
OF PUBLIC LIMITED COMPANIES (PLCs): TREASURY EVIDENCE 2 JULY
In response to questions from Jim Cousins MP
at the Committee's session of evidence held on 2 July, I undertook
to provide the Committee with a copy of Dear Accounting Officer
(DAO) letter DAO(GEN) 13/99 Appointment of Accountancy Firms
to Audit and Other Assignments in the Public Sector, and Nature
of the Auditing Responsibilities. A copy is attached.
2. I would also like to clarify the comments
I made before the Committee at the session of evidence held on
2 July about the competition implications of the "Big 5"
audit and accountancy firms being reduced to 4. My comments were
reported as suggesting that there should be a formal reference
of the four main accountancy firms to the competition authorities.
That was certainly not my intention. If I gave that impression
to the Committee, then I sincerely apologise.
3. My comments need to be seen in their
proper context. I was talking about the broad range of issues
and options being considered by the Co-ordinating Group on Audit
and Accounting issues (CGAA). Competition is one issue being considered.
However, the Group's view is that is outside the scope of its
remit, but rather a matter for the competition authorities to
consider. The Group is preparing an interim report that has yet
to be finalised, but which will be submitted to Ministers later
this month. It will then be for Ministers to decide what further
action, if any, should be taken.
8 July 2002