The Financial Services Authority has put its new powers to regulate accountancy firms for investment business out to tender in a move that could lead to one of the institutes - or even a Big Five firm - being charged with monitoring the profession. The joint monitoring unit of the English, Scottish and Irish chartered institutes has emerged as favourite to acquire the investment monitoring role, though any suitable European candidate will be considered.
Roger Purcell, head of recognised professional body supervision at the FSA, said the authority was required to carry out its monitoring in the most cost-effective manner. The FSA's new regulatory powers would mean taking on extra staff, making it too expensive. 'We wanted to see if we could get a better bid from someone else.
We are expecting bids from recognised professional bodies themselves and we hope to get bids from the major accountancy firms who are experts in this sort of activity,' he said.
An advertisement, which has been placed in the Official Journal of the European Communities, does not place any limits on how many firms could be regulated by one body, and the English ICA has already expressed an interest in monitoring all 2,000 firms that will fall under FSA regulation.
Chairman of the professional standards office Peter Wyman said: 'The Joint Monitoring Unit has got a good track record and has the capability of monitoring all of the RPBs, and we are in discussion with the FSA to determine the scope and requirements for the work.' Purcell suggested the JMU would be a good candidate for the role. It has 33 inspectors and 12 technical and quality control staff and it already monitors the accountants of the English, Scots and Irish ICAs, as well as firms of actuaries.
But ACCA would defend its own rights to monitor small companies. Director Anthony Booth said the association had a distinctive approach which offered value for money. Big Five firms such as PricewaterhouseCoopers already have a monitoring arm for general insurance business and a potential battle for supervisory power could emerge between the institutes, as well what they will see as Big Five interference. The deadline for receipt of applications is 13 December which will be followed by preliminary vetting. Purcell expects an appointment to be announced by 1 April 2000.
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