Last month in Financial Director Liberal Democrats leader Sir Vince Cable called for the break up of the Big Four accountancy firms on the back of problems in numerous audits, most recently in that of collapsed outsourcing group Carillion.

Today Michael Izza, chief executive of accountancy body the ICAEW, writes in Financial Director that that approach would be a mistake- and argues instead for innovation of the audit process.

At the same time, members of the International Forum of Independent Audit Regulators (IFIAR), have identified serious problems at 40 per cent of the 918 audits of listed public interest entities they inspected last year.

The audit inspections focused on organisations in riskier or complex situations such as mergers or acquisitions, according to the IFIAR, whose members include 52 audit regulators around the world.

The most common issue identified by these regulators was a failure among auditors to “assess the reasonableness of assumptions”.

The second biggest problem was a failure among auditors to “sufficiently test the accuracy and completeness of data or reports produced by management”.

There is clearly scope for addressing the issue at the highest level- something that Financial Director will take an active role in.