17 August 2007
Local authority pension schemes have attacked many of the UK's biggest firms for not disclosing adequate information about the work of their audit committees.
The Local Government Pension Fund Forum, which controls around £75bn of councils' retirement assets, claims that many FTSE 350 firms do not take their reporting requirements seriously enough.
Research by the forum claims that 23% of FTSE 350 companies, including 11% of the top 100, 'do not adequately report on the activities of their audit committees' and are not following guidance introduced in the wake of auditing scandals such as the collapse of the US energy firm Enron in 2001.
Some FTSE-listed companies merely publish the terms of reference for their audit committees, which scrutinise companies' use of external auditors to prevent Enron-style conflicts of interest from developing.
Guidance on the use of audit committees has been introduced. But the LAPFF claims that 'many firms do not act in the spirit of the guidance'.
LAPFF chair Councillor Darryl Pulk said: 'Audit committee reports represent an area of company reporting where we believe there is substantial room for improvement. Simply disclosing the terms of reference is not good enough. We want to see meaningful reports.'
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