PracticeAudit‘Stock exchange should pick US company auditors’

'Stock exchange should pick US company auditors'

Independent bodies such as the New York Stock Exchange and the technology stock market, Nasdaq, should decide which firms audit publicly-listed companies in the US, a leading academic has said.

Link: WorldCom special report

Writing in the Asian edition of the Financial Times, David Skeel, a professor at the University of Pennsylvania Law School, said Sarbanes-Oxley addressed the issue of conflict of interest (in the case of firms providing consulting work to audit clients) but did not address the real problem: ‘the fact that each company picks its own auditor’.

He went on to say: ‘[President] Bush should have proposed that a truly independent body, such as the New York Stock Exchange or Nasdaq, assign the auditors of America’s largest companies.

‘Under such a system – with a stock exchange rather than the company as their client – auditors would now cast a much colder eye on the numbers they pore over each year, and would uncover corporate shenanigans much earlier.’

Skeel is also author of the soon to be published: Icarus in the Boardroom: The Fundamental Flaws in Corporate America and Where They Came From’ .

Related Articles

PwC replaces EY as Domino's auditor

Audit PwC replaces EY as Domino's auditor

5d Alia Shoaib, Reporter
The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

Audit The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

2w Carl Johnson, Stephensons
BDO holds off Big Four to retain top position as AIM auditor

Audit BDO holds off Big Four to retain top position as AIM auditor

2w Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

Audit FRC urged to fine Big Four firms penalties over £10m

3w Alia Shoaib, Reporter
EY to audit Standard Chartered bank

Audit EY to audit Standard Chartered bank

1m Alia Shoaib, Reporter
KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

2m Emma Smith, Managing Editor
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
Top 50+50: Firms post significant growth in new tax and audit rankings

Audit Top 50+50: Firms post significant growth in new tax and audit rankings

2m Emma Smith, Managing Editor