MPs turning on accountants – time for action

It’s official the heat is now turning on accountants and auditors for what is being viewed by some as their contribution to the credit crunch and financial crisis.
Yesterday, backbenchers tabled a motion demanding improvements to bank accounting and transparency. On Monday former government minister Michael Meacher protested over ‘dodgy auditing’ while speaking in the House of Commons.
I have to say this is just the start. Ironically it comes most of it comes in the 48 running up to a Northern rock announcement that it will not be taking action against auditors PricewaterhouseCoopers following its own investigation.
MPs are unlikely to take this as a sign that things are alright. Even if they are. After Enron the public perception of accountants is pretty low.
Let me make a tentative suggestion here that the powers that be in accounting might want to consider.
To help head the wilder accusations that will no doubt come the way of accountants, it might be prudent to consider whether a review should be undertaken of the framework and aims of auditing in relation to banks.
This would not be a review looking to point the finger or find negligence. No, it would be an examination of whether the current general structure of an audit is appropriate to the task in relation to banks.
We might also want to consider whether more fundamental training is required in the area of derivatives and securities and their valuation.
Instigating these kinds of reviews, instead of having them imposed, would head off accusations that the profession was burying its head in the sand and beef up its reputation for responsible action.
Insiders tell me that think some kind of review is inevitable. the profession might as well start the work itself.

Related reading