Some of the City’s leading figures are being drafted in to aid a Government-commissioned probe of the audit regulator, days after a scathing parliamentary report castigated it over the collapse of Carillion, the construction group.
Sky News has learnt that Sir Peter Gershon, the National Grid chairman, Anne Richards, the boss of M&G Investments, and Nikhil Rathi, the London Stock Exchange chief executive, are among roughly a dozen panellists who will assist Sir John Kingman, the former Treasury mandarin who is leading the inquiry.
The review was ordered by Greg Clark, the Business Secretary, amid growing criticism of the FRC’s scrutiny of audit firms and their clients.
Sources said the panel working on Sir John’s review would be announced by Mr Clark’s department on Friday.
Its other members are Lucinda Bell, former chief financial officer of British Land and now chair of the audit committee at Rotork; Mark Burgess, a senior fund manager at Colombia Threadneedle; Sir John Cridland, former director-general of the CBI; Dame Amelia Fawcett, a non-executive director at the Treasury; Amelia Fletcher, professor of competition policy at the University of East Anglia and a non-executive director at the Competition and Markets Authority; Simon Fraser, who chairs the Investor Forum; Teresa Graham of Salix Finance and the HMRC administrative burdens advisory board; and Dame Mary Keegan, former chair of the Accounting Standards Board and PricewaterhouseCoopers’ first female audit partner.
A BEIS spokesman declined to comment but said that the names would be made public in due course.
The announcement will come two days after the FRC was attacked for demonstrating “feebleness and timidity” by two select committees of MPs investigating the collapse of Carillion.
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The audit watchdog said this week that it was progressing its own investigations into KPMG, Carillion’s long-standing auditor, and two former finance directors of the company, but insisted that it would “not cut corners” order to reach its conclusions more rapidly.
The FRC has also been targeted over its conclusion last year that KPMG should face no action over its auditing of HBOS, the mortgage lender which collapsed into Lloyds’ arms in 2008.
Appearing before MPs last month, Mr Clark said: “If you look back at the timeliness and record of some of the FRC’s investigations, I know that the [select] committees have been questioning whether it could have been more prompt and more rigorous.”
Critics of the way the audit profession is regulated suggest that the FRC’s enforcement powers are too limited, and that it is too reliant on employing people with long careers at ‘big four’ firms behind them, leaving it exposed to conflicts of interest.
In response to Mr Clark’s comments last month, the FRC said the review of its work would provide “an opportunity to consider changing public expectations and whether our powers are adequate to meet those”.
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Among the FRC’s other main duties is overseeing the UK’s corporate governance code, which is in the process of being overhauled.
The FRC declined to comment on Sir John’s review.