The Big Four admitted that they violated independence rules when conducting audits

PwC, Deloitte, EY and KPMG, known as Big Four According to the Financial Times, along with KPMG, as they are the world’s auditing and advisory firms, they have admitted to hundreds of breaches of rules designed to protect the independence of their audit work.

According to the prestigious financial newspaper, the allegations come a year after the Public Company Accounting Oversight Board (PCAOB) approved new auditing rules. The PCAOB has decided in 2023 to routinely include data on violations of the independence of the audit firms it oversees.

The US regulator requires audit firm employees and their immediate families to disclose full financial information, including their investments, and prohibits employment and financial relationships with audit clients that could undermine the firm’s independence.

PwC said it identified 129 breaches of independence rules affecting 74 clients. PCAOB inspectors discovered another violation during an inspection of the audit work in 2022.

Deloitte reported 129 violations with 78 clients to authorities in 2022 and 107 non-compliances with 53 clients in a 2023 review.

EY noted that it found independence violations affecting 3% of its audits in 2022. KPMG is the only company Big Four which has not yet reported its figures. They will be made public in upcoming PCAOB reports, according to the auditing firm.

According to the Financial Times, the three auditors who committed the violations concluded that there were no cases where audit independence was truly compromised.