Report Audits the Auditors

Big accounting firms have some homework to do when it comes to giving out regulatory compliance advice, at least in the U.K.

The Professional Oversight Board for Accountancy (POBA), a group charged with ensuring that auditors hired by public companies in the U.K. act in accordance with regulatory guidelines, yesterday published a report, outlining the results of an audit of the Big Four U.K. accounting firms.

POBA director Paul George says the actual results are confidential. The public report does not mention specific firms by name, although it treats with Deloitte & Touche LLP, Ernst & Young, KPMG, and PricewaterhouseCoopers.

All four firms were inspected by the POBA's Audit Inspection Unit from June 2004 through the end of March 2005.

Among "recurring issues" cited for improvement, POBA found cases where top firms hired to help companies identify how well their records met regulations actually didn't know what they were looking for.