ICGI 04-05 - Buck up Big4 Audit Firms

ICGI 04-05 - Buck up Big4 Audit Firms
FEC Report - Public Assurance

attrition of ethical values as a constant threat to society

The crucial aspect of corporate management is the acknowledgment, from Socrates to Marc Benioff, of the attrition of ethical values as a constant threat to society. Socrates had to teach the unlearned whereas Benioff has to appeal to the senses of the learned. The learned run far more risks than the unlearned. Merely professing fiduciary responsibility for the society insincerely but not being ready to avow, acknowledge, and assume the ethical responsibility to act upon, prevents a company from progressing forward. [My book extract]

In this context I am giving here a few extracts from my Podcast Episode #47 for this presentation deriving conclusions on the big 4 audit firms.

Buck up Big 4 Audit Firms

Here are 5 key points summarizing the transcript:

1. The "Big Four" audit firms (Deloitte, PwC, EY, KPMG) play a crucial role in accounting, but have been involved in auditing controversies with several high-profile companies.
2. There is an "entanglement" between auditors, bankers, and companies, especially in the startup ecosystem, leading to potential conflicts of interest.
3. Several Indian startups (e.g. Byju's, Go Mechanic, PhonePe) have faced auditing issues, delays in financial reporting, and valuation markdowns.
4. The transcript criticizes the lack of governance in startups and the role of big investors, suggesting that poor governance leads to forensic audits and valuation markdowns.
5. I argue that India's experiment with foreign audit firms has failed and call for the Big Four firms to "buck up" and improve their performance and responsibility.