Madam, – The 2,200-page report published on the collapse of Lehman Brothers makes grim reading. The layman can rightly ask where the auditors were and how can they squirm away from the responsibility they owe people seeking to rely on their work – investors.
Given the importance of the banking sector to all our lives whether we like it or them (bankers) or not, there is now surely a very convincing case to have bank audits made the subject of government appointment and not subject to any fee tender pressure. The “Big Four” accountancy firms will always be the only realistic audit options for appointment but they should be regularly rotated to prevent the chance of any relationship developing between client and auditor which could colour judgment and independence – the bedrock of an audit opinion.
Auditors should be like investigating Revenue officials – feared. The night before the audit starts should be a restless one for the banker rather than the present system which prevails where the investors toss and turn all night. – Yours, etc,