‘A corrupted financial system with a state aided, global cartel fostering mistrust, exhibiting obsolescence and damaging Total Stakeholder Value – all in plain sight’

Press Release: Maturity Institute releases preliminary report on Big 4 accounting firms

London, 23 October 2017: ‘A corrupted financial system with a state aided, global cartel fostering mistrust, exhibiting obsolescence and damaging Total Stakeholder Value – all in plain sight.’

Organisational Maturity Ratings on OMINDEX:

  • Deloitte: OMR B ; Risk Factor 52.68%
  • PwC: OMR BB- ; Risk Factor 55.93%
  • EY: OMR BB- ; Risk Factor 56.49%
  • KPMG: B+ ; Risk Factor 58.86%

Key findings include:

  1. Each firm has an Organizational Maturity Rating (OMR) at or below “Junk” grade reflecting material value loss arising in Total Stakeholder Value terms.
  2. Our evidence shows that Total Stakeholder Value loss among the Big 4 is likely to be in the magnitude of tens of billions ($) annually.
  3. The Big 4 exhibit an underlying purpose primarily focused on revenue growth creating an inherent conflict with their fundamental purpose of system assurance.
  4. OMINDEX Risk Factor levels range from 52.68% to 58.86%. We expect audit failures to remain at current levels with the possibility of extreme cases arising. All firms are carrying significant risk as the causal factors inherent within Arthur Andersen at the time of the Enron scandal continue to exist in each firm today.
  5. We see little effective risk management with inadequate capability to monitor governance, cultural and human capital risk factors. This applies to both external audit services and internal risk control systems within each individual firm.

Paul Kearns, MI Chair said: “This report provides a unique, evidence based analysis of the serious societal risk arising from the accounting profession. The Big 4 represent a systemic problem that needs fixing and our report shows how this can be done through the firms themselves, their regulators and other stakeholders such as the investment sector, which is so reliant on assurance provided by auditors.”

For your free copy of the ‘Big 4 Report’ contact stuart.woollard@omservices.org

ENDS

About the Maturity Institute: MI provides a unique, evidence based approach to organizational health and the creation of Total Stakeholder Value. MI has created a new, revolutionary approach to organizational health by raising global standards of professionalism in organizational leadership and management practice. Our OM30 diagnostic instrument enables measurement and improvement of Total Stakeholder Value (TSV) created by organizations and provides ratings on OMINDEX: a comparative scale from D to AAA. Our work is multi-disciplinary and uses a whole system perspective, aiming to adopt the same level of evidence-based decision making to be found within the medical profession for human health. www.maturityinstitute.com

This entry was posted in Evidence-based management, Organizational culture, People risk management, Whole system thinking and tagged , , . Bookmark the permalink.

Comments are closed.