UK proposes tougher accounting test on banks' health
LONDON Jan 30 (Reuters) - Accountants will have to determine more thoroughly if a bank can stand on its own two feet without taxpayer help for well over a year under draft changes put forward by Britain's audit regulator on Wednesday.
The Financial Reporting Council (FRC) said auditors like KPMG, PwC, Deloitte and Ernst & Young would have to examine in-depth threats to a company's business model and capital adequacy through the economic cycle for the sector a company is in.
The planned reform stems from anger among UK policymakers that auditors gave banks a clean bill of health just before taxpayers had to shore them up in the 2007-09 financial crisis.
Currently auditors only attest to a company as a "going concern" for the following 12 months, but an inquiry by Lord Sharman recommended a longer period and wider criteria.