Big Four teetering on 'burning platform'
PricewaterhouseCoopers has gone on the offensive as the profession clamours for more protection from potentially firm-ending litigation in audit-related lawsuits.
Big Four audits of multinational companies, placed them on ‘burning platform which could collapse at any time’, PwC claimed.
This warning came as an academic analysis commissioned by the Big Four revealed that the firms are effectively betting their businesses by auditing the books of multinationals, the Financial Times revealed.
In its submission to the government’s public consultation on whether to offer more protection to audit firms, PwC said the risks involved in auditing were ‘uninsurable, unquantifiably, unmanageable and could at any time destroy our firm, or any of our competitors’.
In 2002 Andersen, then part of the Big Five, collapsed following its work as auditor of Enron. Ernst & Young is currently facing a negligence action of £2.6bn by former audit client Equitable Life