About Me

This blog carries a series of posts and articles, mostly written by Anthony Fitzsimmons under the aegis of Reputability LLP, a business that is no longer trading as such. Anthony is a thought leader in reputational risk and its root causes, behavioural, organisational and leadership risk. His book 'Rethinking Reputational Risk' was widely acclaimed. Led by Anthony, Reputability helped business leaders to find, understand and deal with these widespread but hidden risks that regularly cause reputational disasters. You can contact Anthony via ajef{at]reputability.co.uk

Monday, 24 January 2011

The demise of Audit?

It is clear from today's FT at  that the big four accountants fear collapse to the extent that they are discussing contingency plans.  The discussions centre on how to re-boot a new company as a phoenix from the ashes of the old.

As the demise of Arthur Andersen illustrates, any sign of 'rotten' sends clients running elsewhere - what is the value of an audit certificate from a malodorous firm?  The suggestion from John Griffith-Jones of KPMG, that 'regulators might need to compel clients to stay with a stricken auditor temporarily', is therefore particularly striking. 

But the discussion should not just be about whether and how a big audit firm can rise like a phoenix from its own ashes.  It should include whether audit as we know it would survive as a business after the destruction of a Big 4 audit firm.  That one has been filed under "Too Difficult". 

Update: See also Lex on 24 February 2011

Anthony Fitzsimmons
www.reputability.co.uk

No comments:

Post a Comment