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

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

4d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

1w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

2m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter