UK accounting firms call for end of ‘name and shame’ practice by Regulators during investigations

In UK, the largest Accounting firms have told the Financial Reporting Council (FRC)—the industry regulator - to stop publicly "Naming and Shaming" firms right when the investigations begin. It should happen only after misconduct is proven. They not only damage reputations but also cause stress for Auditors - as per the firms.

Even as FRC argued that this will ensure transparency and robust action, they however are willing to review the policy. 

This sort of an approach is being considered as more "Business friendly" and "pro-growth approach". 

Last year, the Financial Conduct Authority (FCA)—which regulates banks, had to drop similar ideas of naming and shaming. Accounting firms want the same thing to happen to them. 
As per the firms, naming should happen 

1. If extreme misconduct is found
2. At the end of the process

Our view: 

While it may seem logical that "Naming and Shaming" of accounting firms should be done after the completion of the enquiry, and only if such firms are held liable, on the flip side, investigations carried out in complete secrecy could raise lots of questions on the approach and quality of investigations. However, the fact that UK regulators are reviewing the proposal suggests that they are considering it.

However, a similar policy is not advisable for India. India's corporate governance structure is in the nascent stages, and accounting firms play an important role in this ecosystem as one of the key gatekeepers. Indian accounting firms have only been held liable in high-net-worth scams. So "Naming and Shaming" these firms are a way to hold them accountable and ensure a fair and proper investigation is carried out. This is also something that NFRA has been pushing for, and the proposal by the UK firms will push back corporate governance reforms in India. 

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Link - https://www.ft.com/content/cb6367e9-12b7-4ca5-9fed-c0cef327c643