Select Committee on Treasury Appendices to the Minutes of Evidence


APPENDIX 30

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.

David Loweth

8 July 2002



 
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