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The big four auditors are failing – and the watchdog’s report won’t change that | Prem Sikka

The near-collapse of BHS, Carillion and the bailed-out banks wasn’t spotted. The CMA’s remedy shows it is not fit for purpose

What do BHS, Carillion, Conviviality, Quindell, Aero Inventory, the Co-op Bank, and London and Capital Finance have in common? They were all audited by the big four accountancy firms – PwC, KPMG, EY and Deloitte – which audit 97% of FTSE 350 companies and collect 99% of audit fees. In each case, these firms collected huge fees and delivered little of any public value. Their failure to spot the fragility of those businesses resulted in the loss of jobs, savings, pensions and tax revenues.

Yet the victims of these failures have no legal recourse to seek compensation because auditors owe a “duty of care” only to the company that hires their services, not to any individual stakeholder or creditor.

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