The accusations are not only from lay-people. Some academics have asked what the auditors were doing and some politicians have been vociferous in their accusations.

Privately there are those in the institutes who acknowledge that the audit of banks and financial institutions investing in the complex financial products will need some kind of review. Do auditors really understand the products they were auditing? Is the education of auditors keeping pace with developments in the markets?

Any official review, sometime from now, is more likely to look at the framework for auditing financial institutions rather than examine the culpability of individual audit firms. Having said that we cannot rule it out.

What we have learned is that lawyers are already dealing with enquiries from worried clients concerned about the relationship with their auditors. What they want is advice on what they should do with documents going back and forth with the auditor. The lawyers are saying don’t do anything that might prejudice your opportunities for litigation. It’s what you might expect, but it’s still frightening.

What it suggests is that, rightly or wrongly, someone will launch an action against an auditor in relation to the credit crunch. More generally, the profession will be pushed to explain itself, in some cases on an individual basis.

What we see is the first hint that there may be another trying time on the horizon for auditors. Once again the argument will have to be made that while auditors should carry their share of responsibility, it is difficult to see why they should underwrite the entirety of the world’s markets.

comment@accountancyage.com

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