Accounting professor: break up the Big Four audit market

A high-profile academic has called for the big accounting firms to be stripped of their bank audits and for an independent enquiry into the 'continuing failure of auditors to deliver meaningful audits'.

Prem Sikka, a professor of accounting at Essex University and a vocal critic of the profession, said that the Big Four firms had given banks a clean bill of health and were now lobbying the government to provide them with more protection from lawsuits.

'Auditors already enjoy too many liability concessions,' wrote in an article for The Guardian. 'They can trade as limited liability companies and thus limit the liability of their owners. However, auditors are not keen to relinquish the tax perks available to partnerships, or provide meaningful information about their business.

He added: 'The government could reform the audit market by breaking up the big firms. It could remove them from the audit of banks and insurance companies and delegate that task to a dedicated regulator.'

It could award audits of public bodies to medium-size firms and thus ensure they develop their expertise and challenge major firms … Rather than awarding further liability concessions to auditing firms there should be an independent inquiry into the continuing failure of auditors to deliver meaningful audits.'

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Time to count the cost of failure