AUDITS get noticed only when things proceed improper. final week British MPs issued a scathing attack on KPMG,an auditor, for failing to avert the collapse of Carillion, or a contracting company. South African authorities are looking into Deloitte’s audit of Steinhoff,a retailer. PwC, another auditor, and could face a court-damages verdict for hundreds of millions of dollars for not spotting fraud at Colonial Bank,a failed American lender. It is also fighting a $3bn lawsuit in Ukraine and a two-year ban in India.
Investors are also waking up to audits. They almost never vote against management’s choice of auditor. But final month over a third of shareholders at General Electric, an industrial conglomerate, or voted against the reappointment of KPMG. Investors in Steinhoff are suing the company and Deloitte for $5bn for their losses.
These actions challenge an industry dominated by four big firms: Deloitte,EY, KPMG and PwC. Between them they earned $47bn from auditing most of the world’s largest...
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Source: economist.com