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Boards can become prisoners of their own culture, for example bureaucratic boards where an overly controlled rules-based philosophy dominates, with inflexibility of thinking and an insistence that board processes are what counts. This is very dangerous as it leads to a lack of challenge and independent scrutiny by board members. The consequences have been repeated failures by the Big Four accounting firms to spot financial weaknesses during audits which have jeopardized businesses across the globe risking investor funds, pension plans and even the existence of firms themselves as was seen in the collapse of Arthur Andersen. They have failed to deal with conflicts of interest and too often put revenue generation ahead of sound audit for their customers. Controlling over 95 per cent of the audits of FTSE 350 companies, regulators are preparing plans to reform the sector and in the meantime the Big Four are receiving fines.
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Auditors Criticised for Role in Financial Crisis. The Financial Times (20 March 2011).
The Audit Industry Should Serve Society … Not Themselves. Herald Scotland (23 Nov 2009).
Deloitte Faces Record £15m Fine for ‘Serious’ Failures in Autonomy Audit. The Financial Times (9 July 2020).
McKinsey Drawn into South Africa’s Sprawling Corruption Scandal. CNN Money (19 Sept 2017).
Critics Say UK’s Proposed Big Four Auditing Reforms are Toothless. Organized Crime and Corruption Reporting Project (8 July 2020).
Wirecard Auditors Face Legal Action After Collapse of Payments Firm. CNBC (26 June 2020).
India Bans PwC from Auditing Listed Firms over Satyam Case. CNN Money (11 Jan 2018).
‘Decline in Quality’: Auditors Face Scrutiny over String of Scandals. The Guardian (1 Feb 2019).
KPMG Chairman Defends Audit of Carillion. The Times (12 July 2018).
Deloitte Hands Control over UK Auditor Pay to Non-Execs. The Financial Times (18 Nov 2019).
Only Three Directors Across Big Four Boards are Independent. Compliance Week (9 Oct 2018).
The UK’s Big Four Accounting Firms Keep Failing. Now They’re Being Forced to Change. CNN (6 July 2020).
How U.K. Audit Scandals Pushed Big Four Toward Split. Bloomberg Tax (17 July 2020).
- The Bureaucratic Board: The Big Four
- verfasst von
Randall S. Peterson