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Please call Mark Sproul on +44 (0)131-561 8000. Alternatively, contact him via e-mail.

Notes for editors:

Company Reporting is a monthly journal available in both paper and on the web which monitors the financial reporting practices of UK companies. It is available on subscription only, and a sample copy of the paper version can be obtained from Edinburgh based research organisation Company Reporting Ltd.

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News Release

For immediate release

Companies blasé towards auditor independence

Following an investigation into audit and non-audit fees, Company Reporting concludes that, as long as the current regime persists and irrespective of the systems Smith introduces, analysts will always be wary of auditors' ability to exercise independent judgement.

Fees auditors receive for non-audit services outweigh audit fees on average 1.6:1; in exceptional cases such as Xstrata, the ratio rises to 12:1.

We look at how companies are addressing this "conflict of interest" which arise as a consequence of the magnitude of the external auditors' non-audit fee in comparison to the audit fee - which occurs for more than half the companies in our analysis. Generally, our findings show that robust and transparent disclosures in respect of auditors' independence and objectivity are the exception and not the rule.