Regulator hits out at ‘Big Four’ accountants

The Big Four accountants that dominate the bean-counting industry today came under fire from regulators for poor-quality audits of big banks and building societies.

KPMG, PricewaterhouseCoopers, Deloitte and EY all found themselves heavily criticised for failing to spot the oncoming of the 2007 credit crunch and subsequent economic crisis when they ran the rule over the numbers of the country’s most-crucial financial institutions.

In its 10th annual assessment of audit quality, the Financial Reporting Council found that examination of lenders’ numbers “continues to fall below average”.

In particular, the FRC said auditors have failed to challenge banks and building societies on the insufficient money they have set aside against potential losses on their loans.

Paul George, the FRC’s executive director for conduct, said: “We don’t believe auditors have done sufficient work, or have sufficiently challenged banks... they have not started making the improvements that we would have hoped for.”