Should companies face criminal charges?

My colleague in the UK, Prem Sikka, has alerted me to the "Deferred Prosecution Agreements" the UK is now using when companies break the law. DPAs are being applied in cases of bribery, corruption, and accounting fraud. Companies that have been slapped with DPAs include Rolls Royce and Tesco.

Senior managers can still do jail time for their roles, but under a DPA, the companies themselves get off without facing criminal prosecution. This is the "it's only a few bad apples" argument that has always been used to deflect critiques of systemic problems.

This all raises an interesting question: what does it mean to convict a company of a crime? After all, tou can't throw a company in jail.

No, but a criminal record would exclude a company from public procurement contracts  This would severely hurt a company like Rolls Royce, which bids on military contracts in the UK and the US. Tesco might not care as much.

What about the auditors?

Strangely, the auditors of these companies are getting off without any negative consequences whatsoever. It may come as a surprise to some people to learn that auditors don't actively check for fraud. They report fraud if they stumble across it, but they don't go looking for it.

It's time this changed. Charges against auditors for being accessories to crime would be one place to start.