Mario Christodoulou, Accountancy Age, Friday 15 October 2010 at 09:36:00

"The biggest fraud that ever took place in the UK, namely BCCI, had jointauditors,? partner sais


The introduction of joint audits could increase the likelihood of fraudaccording to a senior Big Four partner.

The partner, who did not want to be identified, said the introduction ofjoint audits in the UK could increase the chance of fraud occurring and wouldnot increase the audit quality.

?A crook could deliberately see an advantage in having two sets of auditors,?he said.

?It needs to be borne in mind that the biggest fraud that ever took place inthe UK, namely BCCI, had joint auditors.?

The joint-audit system, used in France, involves two auditors, unlike the UKsystem where there is only one.

A European Commission green paper on audit reform, released on Wednesday,suggested joint audit as a way to mitigate ?disruption in the audit market ifone of the large audit networks fails?.

However, there is little support for the proposal among UK auditors, who fearit could increase the likelihood of fraud or enable companies to play oneauditor against another in the board room.

The partner, speaking before the release of the EC green paper, said jointaudits would also hit businesses recovering from the recession.

?It seems a bit of a disconnect in the UK context calls for joint audits anda desire to see the private sector create profits and jobs,? he said.

David Herbinet, head of public interest markets at mid-tier audit firmMazars, is pushing for the dual-audit system to be adopted.

?The mood is clearly there for change,? he said.

?People who believe the status quo can continue are in the prehistoric age.?

Further reading:

Auditmarket is "fiercely competitive" Deloitte argue