It strikes me that there are four key firms behind the credit crunch who have suffered nothing like the exposure they deserve. They are:
- Ernst & Young.
They audited all the serious players. They have signed off the accounts of all the banks on a going concern basis that have either now gone bust or needed emergency funding.
The provided the offshore mechanisms for many of the off balance sheet deals that allowed sub-prime refinancing to happen.
They audited those offshore structures.
They ensured they fell out of the tax net.
You can be pretty sure they're auditing most of the hedge funds.
They have been some of the fiercest advocates of the neo-liberal model that has brought the world to its knees.
Why aren't we holding them liable?
Why aren't we creating a new model of auditing?
Why aren't we saying if you want to audit in the UK you can't have an offshore office?
Why are we still allowing people to audit the structures they create?
Why, oh why haven't we learned the lessons of previous debacles when they were so obviously there to see. After all, Prem Sikka has recounted them for years.
Auditing and accounting has to be subject to the regulatory reform that must change the world of finance forever if we survive the current mess.