Editor's letter - Auditors' state of independence.

(From Financial Director)

Our seventh audit fees survey reveals a quite striking collapse in FTSE-100 non-audit fee income paid to the Big Four audit firms. Partly that reflects the structural changes that have taken place in the profession, most notably the sale of PwC Consulting to IBM (a move that also spared us all from the notoriously ill-conceived but short-lived brand name, 'Monday').

Auditor independence was already high on the agenda when the Enron scandal broke two years ago, while Sarbanes-Oxley and the like have refocused the collective minds of audit committees. But whether the auditors are truly independent is one issue; another issue is whether the clients are independent of their auditors - or tied to them. Certainly the clients are weaning themselves off the package of services provided by the huge, global one-stop shops.

But if clients have great difficulty taking their business to another suitable, qualified audit firm, then the issue can become one not of auditor independence, but of auditor competence.

We've ...