More than three-quarters of the 776 finance directors who responded to the survey in Financial Director magazine described the relationship with their auditors as 'professional and amicable'. Eight per cent labelled it 'personal friendship and professional'.
The findings are likely to add to the debate over what many outsiders see as the over-cosy links between finance directors and the accounting firms that audit their accounts. Some critics have suggested that this might have been a factor in the large number of companies that collapsed despite their auditors approving their accounts.
Last month Pensions Investment Research Consulting, which advises funds controlling pounds 40bn, was reported to be recommending clients to vote against the reappointment of Touche Ross as auditors to General Electric Company, where finance director David Newlands is a former Touche Ross partner.
The closeness of the relationship is reflected in the factors finance directors cite as deciding the appointment of auditors. A third said personal chemistry was 'very important' and a half that it was 'important'.
Roger Hussey, professor of financial services at Bristol Business School, who helped to conduct the survey, said that the personal nature of the relationship must at least risk having the independence of the audit 'smoothed at the edges'.
Those who responded to the 3,000 questionnaires sent out also had doubts about the effectiveness of the audit. 'Modern auditing is too concerned with procedures and covering the auditors' backs and not enough with real risks. Most audit failures reflect an inability to deal with dominant personalities; this suggests the profession's recruitment policy is wrong,' one said.Reuse content