Reform of audit industry: it's time to split
Audit has been the subject of intense scrutiny over the past few years in the wake of a series of high-profile business collapses such as Carillion, Patisserie Valerie and Thomas Cook in the UK and, more recently, Wirecard in Germany, and there is no shortage of calls for reform of the audit industry.
The Financial Reporting Council (FRC) has recently taken a major step in audit reform by announcing its principles for operational separation of the audit practices of Ernst & Young, Deloitte, KPMG, and PricewaterhouseCoopers (together, the Big Four), so that their audit practices will, as far as possible, be ring-fenced and run separately from the rest of the firms' operations. For a full analysis of the FRC's first steps in audit reform click here*.
*This article first appeared in the August 2020 issue of PLC Magazine