I’ve written an opinion piece for Accountancy Age comparing the auditor reform debate in the US – what there is – to the active debate in the UK. Here’s an excerpt: In the US, the Big Four leadership is noticeably absent from any public conversation of audit or audit industry reform. It’s hard enough for […]
You might as well be trying to save walruses from an oil spill in the Gulf of Mexico. The Big 4 audit firms’ response plans in the event of catastrophic litigation, if they exist, are likely cookie-cutter boilerplate, out of date, irrelevant and prepared by the same go-to defense lawyers that shill for them and repeatedly negotiate their settlements.
The UK accounting firms’ response to the “pressure” on the industry post-crisis is sharp, quick, and on message. But the “pressure” itself feels like a sinister strategy orchestrated by the audit firms to force legislators to grant their wishes under the mistaken assumption they’re “regulating” the industry.
Let me break it down for you.
The PCAOB’s most recent summary of observations from their inspections process, Report on Inspection Observations of Auditing During the Economic Crisis, is a scathing report describing auditor failure during the crisis that mirrors, in many respects, the findings of the Audit Inspection Unit in the UK. In fact, the issues are quite similar and the firms’ stubborn refusal to acknowledge them is equally familiar.