New FRC chairman backs Big Four split

Simon Dingemans, the recently appointed chair of the Financial Reporting Council (FRC), has backed reforms to split the big six firms

Following a number of high profile company failures, including Carillion, a series of reviews into the audit market proposed the separation of the audit and non-audit businesses of the Big Four in the UK.

They ranged from an operational split to a complete structural split. Dingemans started his role at the FRC last month in preparation for its transition to the Audit, Reporting and Governance Authority (ARGA).

Speaking to the Financial Times, he said, “Operational separation of at least the Big Four, if not the bigger six firms, should be a centre piece of reforms driving audit quality improvements.” “This is a rare opportunity to reform something so wholeheartedly,” Dingemans said.

“Now we have to distil all of the reports into a sustainable strategy for improving audit quality.”

Dingemans stepped down as GSK’s finance chief in May after the company’s agm. He had joined GSK in 2011 from Goldman Sachs where he was a managing director and partner. Under the new regime, Dingemans will work three days a week and will earn £150,000 a year. In 2018, as GFK’s CFO he earned £5.2m.

Sir Donald Brydon, who is currently conducting a landmark review into UK audit, recently said he is “troubled” by the current mood towards auditors.

 

Originally published in Economia on 7 November 2019.