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01 Apr 2011
THE BIG FOUR have responded to the House of Lords report on audit, and their reactions reveal a mixture of indignation and thirst for change.
Enhanced dialogue between auditors and regulators enjoyed universal approval, with the firms eager to show the steps they have already taken to achieve this gold standard.
Further reading
The Lord's recommendation for an investigation by the Office of Fair Trading elicited a more guarded response. Some said they were disappointed at the committee's failure to respect the role of market forces, arguing interference is unnecessary.
Ernst & Young said the question is "complex", but they are happy to co-operate with the investigation, while PwC was more rebellious, insisting quality and value are the only considerations upon which tenders could and should be awarded.
But KPMG notably came down on the side of an OFT inquiry, saying it would "bring to a head the long-running debate on competition and choice", and Deloitte also scrambled to indicate its assent.
Auditors were stung by the cries of "dereliction of duty" and "complacency"; they rejected the Lords' conclusion in this respect and pointed to the committee's acknowledgment that they had fulfilled their duties "in a strictly legal sense". All four ignored the qualification of this statement, where the Lords concluded "that in a wider sense, they did not do so".
The Big Four did not agree with the committee's view of international reporting standards, rejecting the notion that they had contributed to the financial crisis, but all four were open to discussions on enhancing the role of audit.
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources. 
Visitor comments Add your comment
Good on PWC
Good on PWC for fighting back this nonsense. As if some government institution like the OFT has any bloody idea what competition even is, outside of its market share equations and the pseudo-economics they're founded upon. At least they all have the spunk left in them to deflect responsibility for the financial crisis. I mean if you're going to play the blame game, what of the government, the BOE and all the regulations it imposes, both in the financial sector and audit? How's the BOE finances doing right now? The House of Lords is increasingly showing itself to be a farce. What do its members even know about economics or running a business for that matter? They're glorified welfare leeches.
Posted by: Anthony, 02 Apr 2011 | 13:51
Greed auditors - PWC
Yes, let's not change anything at all. That will help the situation.
Posted by: Greedy auditors, 04 Apr 2011 | 14:45
Lords Report
The Lords got it right, we all know that. Well all but the ICAEW who are complicit. If a small firm had been been as negligent their Audit Registration would have been removed, but then such firms carry no sway with the ICAEW.
Posted by: Hadders, 04 Apr 2011 | 21:34