* Two sets of accounts to tighten bank scrutiny
* Crackdown on auditors after financial crisis
By Huw Jones
LONDON, May 7 Banks in Britain may have to
publish two sets of accounts, one for shareholders, the other
showing how they comply with rules from their supervisors, a top
UK regulator said on Wednesday.
Win Bischoff, chairman of the Financial Reporting Council
(FRC), the watchdog that polices accountants in Britain, told
lawmakers he backed their recommendation for two sets of
accounts to tighten scrutiny of lenders.
Policymakers are cracking down on auditors after they gave
banks a clean bill of health only to be rescued by taxpayers
soon after when the 2007-09 financial crisis unfolded.
"As far as the FRC is concerned, I know it's very happy to
work together with the Prudential Regulation Authority in
relation to that," Bischoff told a hearing at the Treasury
Select Committee on his appointment, which he took up on May 1.
The PRA is the banking supervisory arm of the Bank of
England and it would decide what a regulatory audit should
The former chairman of Lloyds, a lender UK
taxpayers had to rescue during the financial crisis, said the
FRC would be happy to help the regulator set standards for
Such audits would be published, Bischoff added.
"I don't have a reservation. I have very great sympathy for
it," Bischoff said.
He said there was concern over the dominance of the "Big
Four" auditors - PricewaterhouseCoopers, KPMG, Deloitte and EY -
who check the books of nearly all blue chip companies.
But it was also difficult to find among the next tier down
accountancy firms who "really feel" they have the competence to
check the books of a global, complex company.
Mergers among the Big Four was be "disastrous", Bischoff
Michael Izza, chief executive of the ICAEW, an accounting
body, said there is quality also below the Big Four audit firms.
"The companies, and especially the audit committees of
corporates, have a responsibility for looking for this quality
and considering all options when appointing an auditor," Izza
said in a statement.
Bischoff told lawmakers accounting firms' scores in regular
reviews by the FRC may also be published to encourage higher
One committee member challenged his ability to be a credible
regulator as a former senior banker during the financial crisis.
Bischoff said he was answerable to a board and while at
Lloyds had helped taxpayers get back at a profit the money they
were forced to put into the lender.
(Editing by Keiron Henderson)