Maybe the Big Four Auditing Firms Do Need to Be Broken Up

Sixteen years after the Enron scandal, auditing firms are again in the news for their failure to detect accounting shenanigans — at U.K. contractor Carillion, at South African retailer Steinhoff, at Colonial BancGroup in the U.S. This has revived a recurring question: Are the firms’ other businesses, most notably consulting, clouding their judgment?

In the U.K., lawmakers have gone so far as to suggest breaking up the big four auditing firms — Deloitte, Ernst & Young, KPMG and PwC. This may ultimately prove necessary, but existing rules should first be given a chance to work.