Accountancy professor lambasts Big Four firms

Prem Sikka, professor of accounting at the University of Essex, says the fitness of PricewaterhouseCoopers (PwC) and Ernst & Young (E&Y) to receive public monies should be questioned after the firms came under the spotlight for their audits of distressed banks, tax avoidance and other practices.

In an article in the Guardian, he criticises the appointment of the two big four firms by USA’s Securities and Exchange Commission to help with accounting and internal controls services in the administration of the complex portfolio of troubled assets it is purchasing.

He notes the SEC appointments were made after E&Y gave a clean bill of health to the accounts published by Lehman Brothers, and PwC signed off on Freddie Mac’s accounts.

‘The government must act to check the catalogue of predatory practices and encourage responsible corporate behaviour,’ he says. ‘Major accountancy firms should not receive any public contracts until there is tangible evidence that they have cleaned up their act and embraced public responsibility and accountability.’

Further reading:

PwC, E&Y clinch lucrative TARP contracts

MP attacks 'dodgy auditing' and conflicts of interest

E&Y faces penalties for Equitable Life role

Read the Guardian story