(Accountancy Age) The introduction of joint audits could increase the likelihood of fraud according to a senior Big Four partner.
The partner, who did not want to be identified, said the introduction of joint audits in the UK could increase the chance of fraud occurring and would not increase the audit quality.
“A crook could deliberately see an advantage in having two sets of auditors,” he said.
“It needs to be borne in mind that the biggest fraud that ever took place in the UK, namely BCCI, had joint auditors.”
The joint-audit system, used in France, involves two auditors, unlike the UK system where there is only one.
A European Commission green paper on audit reform, released on Wednesday, suggested joint audit as a way to mitigate “disruption in the audit market if one of the large audit networks fails”.
However, there is little support for the proposal among UK auditors, who fear it could increase the likelihood of fraud or enable companies to play one auditor against another in the boardroom.
The partner, speaking before the release of the EC green paper, said joint audits would also hit business recovering from the recession.
“It seems a bit of a disconnect in the UK context calls for joint audits and a desire to see the private sector create profits and jobs,” he said.
David Herbinet, head of public interest markets at mid-tier audit firm Mazars, is pushing for the dual-audit system to be adopted.
“The mood is clearly there for change,” he said.
“People who believe the status quo can continue are in the prehistoric age.”
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Businesses will have to think more strategically about where they can source those non-audit services in the future