Top auditors ‘at risk’ of conflict of interest

Auditing houses dependent on top Swedish companies for consultancy fees are also employed to make sure their books are in order, setting the groundwork for potential conflicts of interest, a Swedish accountancy group has warned.

Top auditors 'at risk' of conflict of interest

The Swedish Supervisory Board of Public Accountants (Revisorsnämnden), which represents more than 4,000 Swedish accountants, says the set-up risks posing a problem.

“There is a threat to their independence,” the board’s head lawyer Adam Diamant told the Dagens Industri (DI) business daily on Thursday.

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DI went through the the contracts between the international auditing houses Ernst & Young, KPMG, PWC and Deloitte during last year. Together, they audit 20 of Sweden’s top companies, but the newspapers’ review of 2012 showed that they also earned about half a billlion kronor ($75 million) in unrelated consultancy fees.

One of the risks is that the same auditor ends up having to check through projects that he or she may have been employed on earlier in the year, DI noted.

The European Commission has previously looked at ways to limit the auditor’s additional jobs for listed companies.

TT/The Local/at

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