“Audit is not broken but it has lost its way,” says the author of a new report into the U.K. audit industry, which has faced fierce criticism for not being effective in rooting out apparent governance failures ahead of a spate of large-scale corporate collapses.

Neil Hodge is a freelance business journalist and photographer based in Nottingham, United Kingdom. He writes on insurance and risk management, corporate governance, internal audit, compliance, and legal...