Accountancy Age reported last week that:

The push for auditor liability limitation in the US received a boost today when an influential audit group threw its weight behind the movement.

The Centre for Audit Quality, an autonomous organization which is aimed at serving investors, auditors and the capital markets by improving audit quality, has urged the US Treasury to consider setting a cap or introduce proportionate liability to reduce the risk of the collapse of another firm through litigation

But, let's be candid: Accountancy Age's claim that the Center for Audit Quality is an autonomous organisation looks a little hard to sustain. Its website is hosted by the AICPA, and that is the US auditing profession by any other name. I smell self-interest in this announcement.

More important though is the comment by Francine McKenna entitled "When" another one bites the dust. She is emphatic: another failure is just a matter of time. I strongly suspect she's right.

But as she notes, the real question is so what? She puts it at slightly more length, saying:

What do you need in the way of financial reporting assurances, audits, due diligence, attestations? Does an audit and its useless, boring boiler plate make a hill of beans difference in your investment decisions, or do you all, analysts, sophisticated investors and other stakeholders, make your own decisions based all publicly available information assuming it's timely and accurate? Can we find a way to uncover fraud, punish fraud and warranty the financial information that is distributed to the public so that financial statements are a tool rather than a throwaway?

Right now they are a throwaway. Worse than that in fact. And the audit report has been totally debased. It's easy to explain why. When I was auditing we sought to establish if the accounts showed a true and fair view. Now auditors don't do that. An audit is now defined as:

The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework.

Remember, the change was not imposed on auditors. They chose to do it. And they chose the conceptual framework too. Fair value accounting is the result. But let's be clear, inherent in this is a simple 'mark to market' concept that has meant (ludicrously) that it is assumed that all assets are up for sale at all times in every corporate's accounts, and must be valued at current market worth. This was great when markets in financial markets could be rigged to produce the data auditors needed to show ever rising profits on behalf of their clients. But that did not prove sustainable, and now there is no market there is no price, and so we have massive right downs.

Both positions were ludicrous, but both arise because the framework is flawed: it assumes people only hold assets to sell, not to use. This is the ultimate evidence of the concept of financialisation that only accountants could really believe in. Second, the whole concept of auditing is destroyed by the convention: true and fair counts for nothing anymore because real value is not reported, only current market value. They are not the same thing, but only accountants don't know that.

So, so what if another Big 4 form goes bust? It might just hasten the demise of the ludicrous accounting and auditing environment they created for their own benefit which is imposing massive cost on the world (like so much that the partners in PWC, KPMG, E& Y and Deloittes do). I hate to say this of my own profession, but I think that would be a good thing.