2008 might have been the year in which the credit crunch took hold, but next year could be the year of the audit crunch
This is for two reasons. First, critics of the current form of audit could receive all the evidence they want for proving their point in the shape of a huge scandal involving an auditor and its work on credit crunch related matters. Though there are rumours in the marketplace, there is little evidence yet of anyone taking the plunge and lodging papers at the High Court.
Critics have questioned the role of auditors for some time but the public denunciations remain, for the most part, vague. Should the auditors have been able to give warnings in 2006 reports that something was going awfully wrong? At this point in time the most likely answer to that question is that some form of structural reform is required. The House of Commons Treasury committee is to examine this very question as part of a fresh look at the fall-out from the banking crisis. This will be fascinating to watch because, though the committee has no powers to directly reform anything, its report may create momentum for change.
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