Auditors and financial directors need more freedom to use their own judgment if company accounts are to get any clearer, the six biggest global accounting firms have said.

In a joint paper, the heads of the firms – PwC, Deloitte, Ernst & Young, KPMG, BDO International and Grant Thornton – call for a move towards more “principles-based” accounting standards and away from overly prescriptive rules, but warn that regulators and investors will need to change their thinking if this is to happen.