'Big 4' auditors. Will they be next on the chopping block?

[Eric Mc]

I found this book illuminating -

[Steffan]

I have had little respect for management consultants since, long long ago, I saw a firm charge a great deal of money to a client company at the time, who were getting into financial difficulty.

The management consultants briefly assessed the business and then wrote a report which literally said, in a long and flowery document

"You need to make your products cheaper, sell your products quicker, charge more for them and be generally more efficient."

I was, in the words of Frankie Howerd, amazed. Which company could that trite twaddle not be applied to? What was needed was the method of how to actually achieve, any of the recommendations, but that was literally all the report said. It could be applied to any business at any time, which it clearly was. From then on I have, always found management consultants to be expensive and facile.

Regrettably, the role of management consultants has rise in the UK as the manufacturing base has fallen. Years of experience suggest to me "If you can do: if you can't be a management consultant" to paraphrase GB Shaw. "God preserve me from management consultants" being another prayer.

[johnfm]

Ozzie Osmond said:

johnfm said:

You'd think that of the thousands of accountants at E&Y, PWC, Deloitte and KPMG (over 600,000 employees between them), that some of the auditors might have smelled a rat over the years at various banks.

I think you'll be struggling to implicate them. Directors are responsible for running their businesses, not the auditors. The directors have been making bad decisions and not, so far as I'm aware, fiddling the books.

Well, I 'm not really trying to implicate the Big 4, or accountants or auditors per se.

Rather, I am suggesting (with a bit of tongue in cheek) that it is not just bankers who are 'evil to the core'. In fact, I don't think bankers are evil at all. A small minority have responded to ill thought out incentives schemes.

There is a very very very large pool of billions swilling around and bankers, lawyers, accountants, auditors, ratings agencies, fund managers, pension funds, insurers, politicians et al have been milking that pool.

Bankers are an easy target to label, but there is no doubt similar levels of fee generating going on in all areas of the industry.

[Eric Mc]

Ozzie - auditors are very much in the firing line when things go wrong. When they sign off a set of limited company accounts, they are legally taking on some of the responsibility for the figures in those accounts.

Why do you think the firm Arthur Andersen is no more?