Audit Commission attacks public audit consultation

THE AUDIT COMMISSION was quick to rubbish government plans today in its response to the consultation on the future of public audit.

Already earmarked for the scrapheap, the public audit provider and overseer said the consultation contained two fundamental errors. Firstly, the assumption that public bodies should appoint their own auditors in the same way as companies, and secondly, the idea that the Audit Commission’s days are numbered.

Chairman Michael O’Higgins said commission responsibility for public audit appointment was one of the primary safeguards of audit independence, concluding: “It should not be set aside lightly.”

The body also foresaw a future role for itself, albeit in a reduced capacity, as a regulator in the form of a “smaller residual commission or similar body”. Government plans favour handing much of the body’s powers to the National Audit Office and private accountancy firms, leaving no place for the ailing commission.

Differences between public bodies and companies, including their legal framework, lines of accountability and sources of funding, make it imperative to retain independent auditor appointment, O’Higgins argued.

Last summer, Eric Pickles attacked the Audit Commission, accusing it of wasteful practices and crippling bureaucracy. The Department for Communities and Local Government has been consulting on the future of public audit for the past three months, but it appears when it comes to the commission, nothing can save it from a sticky end.