To those who treasure the role of auditors, the humiliation of Andersen is painful.
Ivor Pether, a fund manager at Royal London, said: "The role of auditors has been a weakness in the past that was allowed to continue.
As if to underline that point, the German government said today that it would push new measures to strengthen the role of auditors.
Michel Barnier, European Union internal market commissioner, has also said that the role of auditors needs closer scrutiny, and is expected to publish a green paper on the subject later in the autumn.
The Green report, which harshly criticised the original investigation into HBOS's collapse by the Financial Services Authority, was not commissioned to look into the role of auditors, saying this was up to the FRC.
In particular, there was a "stunning increase in the role of auditors (a four-fold increase in the relative frequency of detections) and of the SEC (a doubling of their importance, albeit from a very low level)".Sharpening upAlas, the economists admit they "cannot determine" what part of the post-Enron reforms has led auditors to sharpen their scrutiny of companies.
INSIDE HIGHER ED Olympus Panel Says Auditing Firms Were Not to Blame | A group of lawyers set up by Olympus to look into the role of auditors in the company's accounting scandal cleared KPMG and Ernst & Young of responsibility, but said individual auditors were to blame, Reuters reports.
The commission is due to publish its final report on how to clean up the City in the coming days and is expected to recommend a clampdown on bonuses, a tougher registration system for bankers and to focus on the role of auditors.
This requires revisiting the role of auditors and independent directors.
