By BILL JAMIESON

In the wake of the global banking ­crisis and the corporate failures and scandals of recent years, accountants have found themselves directly in the firing line.

What should the scope of external company audit comprise? Should analysis and judgement be limited to the accuracy of financial statements? And if the scope is widened, how are standards of governance reporting and disclosure to be monitored and enforced?

Institutional investors are now much more engaged on corporate governance issues, on the premise that integrity in business practice, together with transparency are necessary for financial success.

Attention has again focused on the lack of choice in the auditing market. But there is also a growing debate on the need for a wider audit to help investors assess corporate risk and resilience and to enable them to value companies more accurately.

Over the weekend, the International Accounting Standards Board (IASB), the body that sets standards and protocols worldwide, came under fire from two executives at Standard Life Investments (SLI) – chief executive Keith Skeoch and Guy Jubb, head of corporate governance and stewardship.

In a letter to the Financial Times, they said that the IASB “fails to give explicit recognition to stewardship” in its all-important “conceptual framework” intended to govern the content of standards it prepares.

“Recognition of stewardship by the IASB is insufficient and does not do justice to the importance of good stewardship,” the two men said.

Given the primacy of the IASB on such issues, this is quite a charge. The SLI duo then called for the IASB to rethink its approach and “explicitly to recognise stewardship as a primary purpose of financial statements”.

However, stating this laudable objective is one thing; agreeing the remit of a wider audit of stewardship and ensuring effective compliance quite another.

Recent events have exposed glaring gaps in the audit process and in corporate governance more generally. Investors need only to recall the phone directory size of annual reports from Royal Bank of Scotland and HBOS to remind themselves that information volume alone is no guarantee of good behaviour.

And the scathing report of the Westminster committee of MPs and Lords on the multiple failings of HBOS will have added to public questioning of auditing behaviour and standards.

Accountants, of course, are not alone in the firing line. Non-executive directors, institutional investors and the regulatory industry itself have come under attack. Nor can it be assumed that disclosure and public condemnation are sufficiently powerful agents of behavioural change.

More than 20 years after the Greenbury code on corporate governance and the financial news continues to be dominated by stories of excessive boardroom pay and bonuses unaligned to earnings – Aviva and Trinity Mirror being two recent egregious examples. Other recent controversies include allegations of Libor rate manipulation, payment protection insurance mis-selling and overseas tax avoidance schemes for high net worth individuals.

Even when malpractice is exposed, doubt persists as to whether the most rigorous action has been taken. At Barclays it is by no means clear that the gilded departures of Bob Diamond and now Rich Ricci, the head of investment banking, have cleared the Aegean stables. While there are commendable efforts within banks to re-create a culture of ethical standards and behaviour – such as Susan Rice at Lloyds, for example – much remains to be done.

And structural reforms are still awaited. A useful start may be an independent corporate governance audit to be carried out and the results published in the annual report. But the central difficulty with this is how to balance wider auditing requirements without impairing the entrepreneurial drive of companies and avoiding any new auditing process from degenerating into box-ticking and the mind-set of “compliance minimum”.

Jubb and Skeoch are to be commended for taking the ISAB to task. But putting a wider corporate governance audit into practice remains the biggest challenge.