|
|
02 Mar 2011
A LACK OF non-conflicted expert accounting witnesses could impact on the ability to bring litigation against the biggest firms.
The Joint Disciplinary Scheme, the accountants' watchdog that has issued its last annual report after completing its caseload, warned that the "near monopoly" of Big Four audits of the FTSE 350 meant it was difficult to find expert accounting witnesses to help in tribunals.
The JDS said that the problem, which also affects civil litigation cases, occurs where all four firms often provide services to a single large client.
"If it is not possible to use one of the four large firms, the alternatives may be very limited," stated the JDS.
"An example of the danger which the litigation system faces from this dependence on only four firms can be seen in the Equitable Life Assurance Society case, where the three large firms not involved were conflicted out of acting against Ernst & Young," said the JDS' report.
"The [JDS executive] committee believes that this is a growing problem and it will be for the authorities to decide what, if any, action should be taken to address the situation."
The report also took a swipe at accountants who have failed to co-operate with its investigations.
In one case the JDS considered disciplinary against a managing partner for his firm's failure to work with the JDS.
The partner concerned is not named but the report concludes: "Failure to co-operate has added to the delay in and costs of investigations, all of which have to be borne by other members and member firms."
The report adds: "While the committee recognises that members and member firms are entitled to arrange matters thus, it also considers that managing partners, not the solicitors, are responsible for seeing that their firms co-operate with the executive counsel."
The JDS, which has operated since 1979, was effectively replaced when new cases were passed onto the Accounting & Actuarial Discipline Board (AADB) from 2005. Equitable Life and Semple Cochrane were the JDS' last cases, which were concluded in 2010.
You may also like
Search thousands of financial jobs:
Search thousands of financial jobs:
Careers
Search for jobs
Click to search our database of all the latest accountancy roles
Create a profile
Click to set up your profile and let the best recruiters find you
Jobs by email
Sign up to receive regular updates with the latest roles suitable for you
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
Alternatives are available
As national head of forensic accounting for RSM Tenon, I am surprised that the JDS has concluded that there are ‘very limited’ options outside the Big 4. Whilst there is certainly an issue surrounding the concentration of large external audits by Big 4 firms and there are certain areas of forensic investigation where their expertise may be required, in many cases mid-tier and boutique firms have ample skills to undertake this kind of work. RSM Tenon, for example, is the 7th largest accounting firm in the UK and has one of the largest fraud and forensic accounting teams outside the Big 4. Within the forensic accounting team we have 14 experienced expert witnesses who have all given evidence in Court and are also able to draw upon the skills and experience of the wider firm in relation to auditing, taxation and other technical matters.
Posted by: Chris Hine, 02 Mar 2011 | 12:40