Do we need audits?

Should companies eliminate audits? A interesting viewpoint by 

The current system for analyzing and auditing companies’ internal controls needs an overhaul.

Do the millions that large companies spend on annual audits actually provide the information investors need and are paying for? And are the earnings reports that companies produce trustworthy? If recent events offer any indication, the answer to both questions is likely a resounding no.

On June 8, the U.K.-based CCP research foundation reported that from 2010 to 2014, 16 global banks, including Bank of America, JP Morgan, and Citigroup, incurred $300 billion as a result of regulatory actions and other costs related to misconduct. The improper behaviors weren’t just related to actions before or during the financial crisis. Yet investors didn’t receive fair warning from the banks or their auditors about the multiple control weaknesses.

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