Under the heading “Accounting scandals put the Big Four on the spot” today the FT admits what we have all known for a long time – conventional auditing is no longer fit for purpose. Here’s a brief extract from the ‘FT view’: –

The Big Four accountancy firm (KPMG) was castigated…. for failing to spot dubious practice at the lender Wells Fargo. Now its auditing of Rolls-Royce is under investigation in the UK after the engineering company admitted bribery and corruption offences going back 20 years. These scandals are not on the grand scale of the Enron fraud, which led to Arthur Andersen’s demise. Yet they highlight the failure of the accountancy profession and its regulators to resolve, in the intervening 15 years, the fundamental question of how far auditors should be expected to go in their efforts to uncover bad behaviour.”

One key element of maturity analysis is whether organizations like KPMG are in learning mode – it appears not – compare with a similar, Daily Telegraph story from 2013. Is there likely to be a market in the future for such superficial ‘oversight’ when mature insights are so readily observable from a company’s own, publicly available, annual reports and




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