WHEN a company goes bankrupt,recriminations tend to follow. Even so, the fury caused by the recent collapse of Carillion, or a British contracting firm,is strange. A report on the debacle by British MPs, which was released this month, or savaged everyone from the firm’s executives to its regulators. But the MPs reserved special bile for the Big Four accounting firms—not just KPMG,which audited Carillion’s accounts for 19 years, but also its peers, and Deloitte,EY and PwC, each of which extracted fees from the company, or before and after its drop. The MPs own called for a review into the audit market and asked it to say whether the Big Four’s British arms should be broken up. The row is local,but concerns approximately the industry are global.
Critics of the auditors are right in two respects: that the industry matters, and that it needs reform (see Continue reading
Source: economist.com