The accountancy firm KPMG has gone on the offensive to bolster the image of the accounting industry, badly tarnished by the Enron scandal, and released a survey which it says shows investors' faith in auditors is sky high.
In recent months concern about the reliability of audited accounts has led investors to turn against many companies. On Friday shares at computer maker IBM fell 5 per cent after a report of a preliminary inquiry into its books.
Nonetheless, the KPMG survey, which polled company chief executives and chairmen, claims "an overwhelming 96 per cent said investor trust and confidence (in their audited accounts) was either "very high" or "high". The survey did not poll any investors.
Much of the criticism of auditors has centred on how doing lucrative non-audit work for audit clients opens them to pressure from company executives to be more flexible in approving company accounts. KPMG's survey said 85 per cent of company executives thought that professional service firms handled such conflicts of interest well.
Meanwhile, the Canadian arm of embattled accounting firm Andersen has agreed to merge with Deloitte & Touche LLP after the failure of earlier merger talks with KPMG in Canada. Deloitte and Andersen announced the deal to create one of Canada's largest accounting firms, with about 7,000 employees and annual billings of more than Canadian $1 billion (€711 million).
