Your Big Read article “ Setting flawed standards” (August 2), on auditing in crisis, describes the Big Four accountancy firms as “too big to fail”. In their current shape, certainly. But the Financial Reporting Council could yet decide that the firms should not continue as they are, and order them to hive off “added value” services that so often give rise to allegations of conflict of interest. Such a bold move would be out of step with the traditionally lacklustre and after-the-fact history of accountancy regulation in the UK.
We’ve been here before, of course. Between 2000 and 2002, EY, KPMG and PwC all sold their consultancy practices. Since then, they’ve rebuilt them and then some. What chance that this time the regulator might decide that it’s audit that has to go, leaving the accountants high and dry with their prized consulting assets and, theoretically, deprived of their biggest source of business leads? Anyone with knowledge of previous audit regulation initiatives will know not to hold their breath.
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