Recent statistics show fees paid to auditors for consultancy work continue their remorseless rise. Auditors now devise, process, report, obfuscate, decorate and audit the transactions that they themselves created, which builds in a bias. Has anyone ever seen a qualified audit report on the accounts of an audit client where the firm receives significant consultancy income from that client? In the US there is a growing trend to use audit firms to outsource all accounting services. Recently, BP Amoco announced a $1.1bn deal for outsourcing its accounting services to PricewaterhouseCoopers. Yet the company's 1998 annual report (note 13) shows PwC also audits parts of the company and received $3.6m in fees. The US Securities & Exchange Commission has expressed concerns. It believes that in pursuit of extra fees, auditors, who are after all watchdogs, are becoming puppies of the management. In an unusual step the SEC has bypassed the usual professional channels and appealed directly to academics to undertake critical research on such auditor independence issues so as to develop alternative regulatory proposals. And quite right too. It's crucial to avoid conflict of interests like BCCI, Maxwell and other audit failures. Already company overlords here are expressing concern about the erosion of independence. Yet these issues are being organised off the political agenda. The DTI merely wrings its hands preferring to be seen as a promoter of the accounting industry. Anyone selling financial services has to be 'independent' and declare their connections and interests, but the same notions of independence and transparency are not applied to company auditors. Despite being public regulators, the response from the accountancy trade associations is silence. We'll have to wait for a scandal and the ridicule which follows at which point the regulators will cloud the issues by tinkering with the so-called ethical guidelines. The inevitable calls to end the accountants' monopoly of the external audit market will grow. Nobody will express much sympathy for auditors when the next scandal comes along - as it inevitably will. Austin Mitchell is Labour MP for Great Grimsby.
Bug means Siri can be asked to read aloud all your hidden notifications
Yeah, sorry about all that, simpers Zuckerberg