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Do auditors audit?

The breaking news that KPMG are being investigated over Rolls Royce has once again raised this question. Are we revisiting the malpractice of Arthur Anderson? And even possibly their ultimate fate?

There are two striking comments and observations from the above linked piece

Scandals like the one at Rolls-Royce (or Enron, Worldcom, Tesco and any number of hotspots during the financial crisis) serve to illustrate the structural problems at the heart of auditing and financial oversight.

I think that few would argue with that, which leads in turn to

Recent new rules mean that big public companies (FTSE 350) now have to put their auditing contract up for tender every ten years but are only forced to change every twenty. That’s still plenty of time to get cosy.

I think that is an understatement. This is far too lax and in my opinion,  we should be looking at three years maximum

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