Inspections by the British accounting watchdog FCR have revealed that the overall quality of the work carried out by ”the big four” in the UK has not improved since last year and that none of them is meeting quality control standards. The regulator has criticised the auditors for routinely failing to challenge managers and for working with companies on friendly terms and treating them as clients instead of working in the best interest of shareholders.
While none of the individual firms met the FCR’s targets, the inspections of Grant Thornton revealed that just half of its audits were of acceptable quality, down from 75% last year. PricewaterhouseCoopers did not do much better with a poor 65% approval rate for its audits, down from 84%.
While, according to the FCR, the auditors are making too many mistakes, the UK watchdog itself has received criticism for being “toothless” and is set to be replaced by a new – and potentially stronger – supervisory body called the Audit, Reporting and Governance Authority.
The full article is available on Law360.