maybe auditors can’t afford to be in the auditing business alone.
reflecting on the $522-million verdict against bdo, which makes the global network liable for the work of the u.s. firm, the influential floyd norris (pictured) of the new york times wonders if it’s time to allow outside ownership of auditing firms.
he writes:
“…it is likely to be necessary to revise laws that now say auditing firms must be controlled by auditors — and by local auditors at that. there is no comparable rule that you have to be a banker to own stock in a bank, or an engineer to own shares of a car company. but there are rules that such companies need some directors who are independent of management.
“the time is coming when big international accounting firms may have to be organized in the same way as the big international companies they audit.”
see floyd’s article here.
i’ve long said that assurance services are already managed and marketed like insurance. so, why not follow the securitization of risk to it’s logical extent?