Audit Sector Open To Carillion-Style Failure, Study Warns

Law360, London (April 21, 2021, 11:41 AM BST) -- A study has identified "glaring deficiencies" in auditing practices in Britain that leave the sector vulnerable to more high-profile collapses such as the failure of Carillion PLC, the major construction company that went under with billions of pounds of debt.

Auditing rules need "profound reform" if they are to meet the expectations of the public, the Institute for Public Policy Research said in a sweeping review of the U.K. audit sector published on Wednesday. Auditors are "failing society" by letting businesses off lightly, the U.K. think tank warned.

"Current auditing rules enable 'boom and bust' cycles that enrich bosses and intermediaries but...

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