Top Audit Firms in Crosshairs as U.K. Watchdog Beefs Up Powers

The U.K.’s accounting watchdog is toughening up the regulation of Britain’s biggest audit firms, as the sector faces heavy criticism over a string of high-profile finance scandals.

The Financial Reporting Council said Thursday it’s seeking feedback on beefed-up powers to take over the registration of the auditors of so-called public interest entities. The consultation runs until May 26.

The agency said it currently has insufficient muscle to address “systemic issues” and must rely on the registration powers from professional bodies, which also represent the industry. The proposals will allow it to impose conditions, suspensions and remove registrations.

“Having direct responsibility ...