The US Chamber of Commerce has a new report on the future of auditing. Auditing: A Profession At Risk makes grim reading. It outlines the problems, offers some solutions, but it's quite clear from reading the report that the way ahead is confusing and uncertain.

The report says that the Big Four contracting to Three "would present a major challenge to the viability of the profession, with potential for a negative impact on public confidence in our markets". It says steps need to be taken to make the profession more insurable (which may involve tort reform and defining the limits of the auditor's responsibility), developing an alternative disputes resolution process for fights about audits (which means establishing limits on how far you can indict firms) and clarifying standards (which might require establishing safe harbours and preventing over-auditing).

The report also says that the New York Stock Exchange, Public Company Accounting Oversight Board, Securities and Exchange Commission, NASDAQ and Financial Accounting Standards Board must work on developing competition in the profession.

The report makes it clear that this is a big ask for the SEC: "More generally, the SEC must move away from the expectation that its policies are only of interest to a small cadre of Big Four accountants and affirmatively reach out to the needs of smaller firms - and include them in all debates about new roles and interpretations.''

The report leaves a lot unanswered and concedes that it has said nothing about the litigation that is still outstanding and about the staffing issues facing accounting firms desparate for talent.

Clearly, there's a lot of work ahead and there are no guarantees, a fact well-covered by Alicia Korney, editor of WebCPA.