Leader 11 Feb

It has been a bad seven days for self-regulation. It began last week when Coopers & Lybrand (now part of PwC) was ordered to pay penalties totalling #3.3m for one of the most scandalous audit failures ever. It ended on Monday with ACCA merely reprimanding one of its council members who tried to profit from the flotation of Norwich Union by falsifying dates on application forms.

In the case of Coopers, the evidence gathered by the JDS paints a shocking picture of partners simply taking the word of one of the century’s biggest corporate villains, Robert Maxwell, and his senior managers, without checking the facts for themselves.

If ever a case justified the charge of ‘chaps regulating chaps’ this is it. Coopers, now PwC, escaped with penalties that were a fraction of the fees earned and a tiny fragment of the money lost by pensioners Maxwell swindled.

ACCA’s Robert Jackson put forward the highly unattractive defence that ‘everyone was at it’ and then tried to claim that he had been singled out because he was a council member. And so he should have been. Holders of high office should set an example, especially in professional accountancy bodies who claim the right to regulate themselves.

The fact that Coopers’ penalty was measured in millions or that Jackson’s reprimand was officially ‘severe’ misses the point. Self-regulation has to be above reproach to be acceptable and this week this profession fell well short of that.