Accountancy professor lambasts Big Four firms
Accountancy professor questions the fitness of big four firms to profit from the recession they helped create
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