Monday 22 October 2018 3:09 pm | Updated: Tuesday 21 May 2019 4:22 pm

Santander chair on shortlist to lead new government-backed audit review

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The chair of Santander UK has been shortlisted to lead a new, government-backed review into the future of Britain’s audit sector, following a series of scandals.

Baroness Vadera, a former investment banker and key ally of Gordon Brown, whom she served as a minister, was named by the Times as a candidate to lead the investigation, which is expected to launch in January. City PM understands that there are two or three other candidates on the list alongside Vadera.

The review is backed by the Audit Quality Forum, an industry-backed body formed by the Institute of Chartered Accountants in England and Wales (ICAEW), the Department for Business, Energy & Industrial Strategy (Beis) and audit watchdog the Financial Reporting Council (FRC).

Michael Izza, chair of the ICAEW said the review would offer a “fundamental and independent examination of the role of audit itself”.

The review is the third government-backed investigation concerning the sector to be announced recently. The Competition and Markets Authority launched a sector-wide review into audit competition earlier this month, and Sir John Kingman is currently conducting a review into the operations of the FRC.

The new review, which will focus on audit as a product, is expected to launch in January, following Kingman’s report and the first findings of the CMA.

Separately, the FRC is reviewing its own procedures, and the Labour party is conducting its own review of the sector, led by Professor Prem Sikka of Sheffield University.

The sector has been rocked by a series of high-profile audit failures, including the collapse of mega-constructor Carillion earlier this year, which led to a damning report by MPs.

“As a profession, chartered accountants accept the need for change. Between them, Sir John Kingman and the CMA are now tackling underlying issues of regulation, quality and competition,” said Izza.

“The expectations of investors and wider society have quite rightly increased in recent years, and we need to ensure that audit keeps pace. If that means extending assurance and embracing new tools and new technology, then we must look at that.”

Under Brown, Vadera worked in Department for Business, Innovation and Skills and the Cabinet Office, and between 2008 and 2009 helped devise the government’s plan to rescue lenders after the financial crisis. She joined Santander as its chair in 2015. She was made a life peer in 2007.

A spokesperson for Santander declined to comment.