Pay And Performance:
What is the evidence on rewards for failure at the Big 4?

We know partners in the Big 4 are well paid, but how much do they earn precisely? What is the Big 4 business model and how does the partnership system work organisationally? How do junior auditors experience work life inside the Big 4? And how well does this model work for society? This campaign aims to lift the lid on the Big 4 by examining whether they deliver pay for performance or rewards for failure.

See report →

Corporate Stability:
Do auditors ensure companies report prudently?

Recent corporate collapses show that when strategically important companies fail, they impose large social and economic costs. All stakeholders, including shareholders, creditors, the workforce and government, therefore have an interest in ensuring that companies can stand on their own two feet under adverse conditions. This idea is enshrined in the principle of ‘capital maintenance’, set out in law (the 2006 Companies Act) – that the protection of a company’s capital buffers should be a core legal duty of directors. Are directors ignoring this principle in order to make larger payments to shareholders and increase their bonuses? And are auditors failing to ensure that companies report prudently?

Audit failure in the UK energy supply industry →

Why the principle of capital maintenance and the definition of distributable profits matter →

Climate change:
Are auditors holding companies to account on their environmental reporting?

Any prudent audit would view climate risk as a key audit matter. The transition to net zero is likely to impose some costs on most businesses. But whilst climate risks are regularly recognised in the narrative sections of annual reports, they are generally firewalled from the financial statements. Auditors should be more sceptical of how companies account for their plans to reduce emissions, and should provide an opinion on whether it is prudent for firms to begin investing or provisioning for future climate risks. Auditors should also undertake more due diligence in assessing company climate assumptions, and should explain in detail the models they use to assess climate risk, including the risk that it creates non-linear, correlated outcomes.

New research currently in progress

Public Transparency & Accountability:
How well do auditors audit local councils and other public bodies?

The auditing of public bodies is essential to the maintenance of public trust. But recent exposés raise concerns that some public bodies, including local councils, are not managing their activities and expenditures in a transparent way. How well are public bodies being audited and what role can people’s audits play in holding representatives of these organisations to account?

Financial crisis in Birmingham City Council:
Briefing note part 1 →

Financial crisis in Birmingham City Council:
Briefing note part 2? →

Reimagining The Purpose Of Audit:
What works, what doesn’t and what audit could be.

There is a growing interest inside academic, policy and activist communities in reimagining the purpose of audit – as a public-focused/citizen-led process designed to address important transparency and accountability problems in local and national government, and in economic life more broadly. We reserve this space in our laboratory for open thoughts and reflections on what audit could be.

New research currently in progress