The head of the accountancy watchdog has signaled his intention to pursue
sweeping new powers which will force companies to co-operate with
Cameron Scott, head of the Accountancy and Actuarial Discipline Board (AADB),
said he is hamstrung by limited powers which allow companies to snub requests
for co-operation. He is now preparing a petition to convince government to
legislate new powers.
On a majority of investigations the board is frustrated by recalcitrant
companies who refuse to release documents or individuals, according to Scott.
He said sometimes the information is critical to investigations and that, on
occasion, cases have collapsed due to the stonewalling. “It can make the
difference between proceeding with the case or not,” he said.
“Investigations close for all sorts of reasons and are not pursued… but there
have been investigations where the progress has been frustrated by our inability
to get information and documents.”
The issue featured prominently in the investigation of Ireland’s Emerging
Business Trust between 2006 and 2009.
Scott said he “encountered significant problems in obtaining cooperation from
certain bodies and individuals,” in a report earlier this year.
The board is currently investigating the collapse of MG Rover following the
publishing of BDO’s report into the subject, four years in the making. Scott
said the AADB’s lack of statutory powers was not a major hindrance in this
He did say, however, that the board was finding it difficult to fulfil its
original objectives laid down in 2004. “We have been given a fairly important
function to fulfil and the reality is that we need powers to enable us to do
The AADB asked the government for statutory powers when it was first
established. “The government didn’t want to do that, but they said if it does
cause a problem come back and we will revisit and it has now got to the stage
where we will look at it quite closely,” he said.
Many regulators already have statutory powers to demand co-operation, among
them the FSA, Solicitors Regulation Authority and Nursing and Midwifery Council.
At present the AADB can only force firms and individuals that are members of
professional accounting bodies to help.
The comments come as the Financial Reporting Council, the AADB’s parent
regulator, received powers to protect whistleblowers, which would allow
accountants and other individuals to make a protected disclosure without fear of
retribution from employers.
However, Scott said the powers would have limited use. “The cases we tend to
take on haven’t come from any internal whistle blowing. What tends to happen is
that, when we start investigating something, it is generally made public… it
does give an extra layer of protection though.”
IN OUR VIEW
It’s almost incomprehensible that AADB investigations can be blocked with
a simple “no” from companies. How many cases have collapsed because of this
issue? It needs to be fixed, and fixed fast.
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