EY’s split shows what a big business auditing has become, but maybe it shouldn’t be

BIG 4 public accounting firm EY’s announcement that it will split its auditing and consulting functions has thrown the spotlight on whether both businesses ought to be housed under one roof – with the tussle rooted in just how lucrative each business is.

But, should auditing even be a money-spinning business at all? Isn’t it about time jurisdictions thought about providing it as a public good?

Whom do audits serve?

Auditing, in its most basic form, is believed to have existed since ancient times. Modern financial auditing, on the other hand, could be said to have developed in the 19th century: Accounting historian John L Carey wrote that audits were required by law in England as early as 1845 to protect shareholders from “improper actions by promoters and directors”.