In an exclusive article in today’s Herald, Prem Sikka, professor of accounting at the University of Essex, lambasted the giants for pocketing millions in fees for work that resulted in them giving a clean bill of health to the accounts of many firms that were heading for disaster.

“Auditors of banks could not tell the difference between a tent on Brighton beach or AAA security,” wrote Sikka.

“They too easily accepted management valuations and permitted banks to show toxic assets as good and report profits that did not exist.”

“At least $5 trillion of assets and liabilities simply vanished from bank balance sheets,” he said. “These audited accounts would easily have won the Man Booker Prize for Fiction. Yet no auditing firm has been investigated for its role in the banking debacle.”

A long-standing critic of the auditing profession, Sikka said the banking crisis has provided an opportunity to ban major accounting firms from the vital work of checking the accuracy of banks’ accounts.

He said the audit of banks should be entrusted to regulators, accountable to the taxpayer and to bank depositors rather than shareholders in the companies concerned.

“The above is a small but necessary step to cleaning up the auditing industry and ensuring that it serves socially desirable purposes rather than lining its own pockets,” said Sikka.

In a recent interview with The Herald, Scotland’s senior accountant rubbished suggestions that auditors had failed to detect the problems at leading banks that triggered the global recession.

Douglas Nisbet, president of the Institute of Chartered Accountants of Scotland, said big falls in the value of bank assets in recent periods did not mean they had been valued incorrectly in accounts covering preceding periods.

Noting that the demand for complex instruments like collateralised debt obligations collapsed virtually overnight, he told The Herald: “I think there’s a big distinction between what the value of assets on the balance sheet have moved to be given the crisis that we got into, as opposed to were they wrong at the asset value they were at before.”

At Royal Bank of Scotland’s general meeting in April, new chief executive Stephen Hester appeared to exempt auditor Deloitte from any blame for the problems which led to it requiring a £20bn bail-out from the taxpayer last year.

“We’ve found nothing to suggest any failure of external reporting,” he told reporters.

Deloitte received £58.8m in fees from Royal Bank last year, including £38.6m for the audit and £20.1m for other services. It was paid £31.4m in 2007.

Deloitte signed off RBS’s 2008 accounts as giving a “true and fair view” and did not qualify its audit opinion in any way. The resolution to reappoint the firm as auditor of the 2009 accounts was approved by 99.77% of votes cast at the general meeting.