AUDITORS are often accused of being too lenient on the companies they scrutinise. After all, those companies pay the bills. The four that dominate the market—Deloitte, EY, KPMG and PwC—also offer lucrative services like consulting and tax advice. Concerns have long swirled that conflicts of interest risk deterring auditors from challenging dodgy accounting.
Recent controversies have centred on KPMG, the smallest of the Big Four. In Britain lawmakers have criticised it for signing off the accounts of Carillion, a public-sector contractor that later went bust. A regulatory investigation is under way. Last week regulators fined it for misconduct in its audits of Ted Baker, a clothing retailer.
In America three former partners face criminal charges for alleged involvement in the theft of confidential information about the regulator’s plans to inspect KPMG audits. In South Africa KPMG is under investigation for its work for companies owned by the Gupta family, which has been accused…
