MPs turn up heat on the Big Four

THE influential Treasury Select Committee of MPs has recommended the compulsory rotation of auditors. The cross-party committee is concerned abut the close relationship between companies and their auditors and the potential for abuse.

The committee published its findings ahead of Trade and Industry Secretary Patricia Hewitt's report on Wednesday. Both will pave the way for changes in the profession.

It says the absence of 'any kind of rotation requirement leaves a perception and almost certainly the reality of an undesirable cosiness between some firms and their auditors'.

The committee said there was a need for auditor rotation in principle and wants the Government to produce proposals to implement it: 'We consider that there is a good case for requiring audit committees to look explicitly at rotation of audit firms every five years.'

About 90% of FTSE 100 companies have had the same auditor for more than a decade.

The committee also voiced concern on share options, saying it opposed them being used as a 'significant source of remuneration', and called for a strong single independent regulator for the profession.