What happens when auditing fails?

Audit failure has significant real-world consequences. Bad business practices can lead to layoffs, lower tax revenues, poorer pensions and destabilised economies. And because a lot of stakeholders don’t realise exactly how many issues audits can have, they can end up putting more trust in the process of auditing than they should and end up getting burned.

We spoke to six people who experienced audit failure first hand, whether as a current employee, a retired employee drawing a company pension, or a company contractor. The companies involved were Thomas Cook, a travel agency; BHS, a department store; Carillion, a construction firm that often did projects for the UK government; and Patisserie Valerie, a bakery chain. All of these businesses were well-known, apparently successful UK-based firms that went bust suddenly and spectacularly. In each case, their auditors (which together make up the entire Big Four) were roundly criticised and fined for not doing their jobs properly, and for missing or ignoring the underlying problems with the company’s accounts. 

You can read their stories here: 

1) Katy’s Story (Thomas Cook)

2) Olivia's Story (Thomas Cook)

3) Lin’s Story (BHS)

4) Kevin's Story (Carillion)

5) Andy’s Story (Carillion)

6) Ross’ Story (Patisserie Valerie)