Finance Monthly May 2019 Edition

uditors have become punching bags for governments that have struggled to respond to the aftermaths of the financial crisis. Anger and distrust remains in the public domain. There is little sense of accountability for misconduct for executives or their intermediaries. The few trials against individuals have resulted in little to no jail time. Intermediaries such as bankers have gone largely unscathed. The weaknesses in capitalism have never been felt with such intensity, so raw and painful. We are wrestling with issues of inequality, with dwindling expectations or hopes for more shared prosperity. Capitalism is rightfully under attack for delivering uneven prosperity and leaving so many behind. There are important voices in business such as Warren Buffett and Larry Fink who have been calling for more responsible leadership and investing to address the shortcomings. Amidst these daunting challenges, auditors present an easy target for governments to signal accountability and reform. We must resist following myopic and uninformed views. Reforms are needed to make capitalism more effective. Audit reforms Auditors and the accounting profession in countries such as the UK and The Netherlands are facing their worst crisis in a generation. There is a widespread perception that weak audits have contributed to business failures and that auditors are not fulfilling their mandates. In particular, the Big 4 firms are accused of putting their self-interest ahead of the public interest. And, following the financial crisis of 2008 and the ensuing scandals, there is public outrage and intense media scrutiny on the accountancy sector. Never before have auditors been so famous for all the wrong reasons, says José R. Hernandez. José R. Hernandez, CEO of Ortus Strategies A ARE WE USING AUDITORS AS PUNCHING BAGS? 26 www.finance-monthly.com SPECIAL FEATURE - AUDITORS