View from the House – Austin Mitchell

Some accountancy bodies must have money to burn. Despite all the previous failed attempts at mergers, restructuring and co-operation, ACCA has just launched a unilateral mailshot in what looks like an attempt to take over CIMA and CIPFA. Evidently, it has #200,000 to chuck away.

Newspapers are full of accounting, auditing and insolvency failures.

Millions of stakeholders have lost out. Small practitioners complain of heavy-handed regulation which leaves the big boys unscathed. Yet, in the midst of all this, the bureaucrats build bigger but not better empires.

The flimsy premise is that an enlarged body could solve accountancy’s problems. But how could it pacify stakeholder demands, transform balance sheets and income statements and make audits effective?

It cannot do anything about auditing practices of major firms, conduct the fundamental review of audit we need, or inquire into failures. Indeed, that’s not the intention. The aim of this merger is to build a better self-protection society.

ACCA’s glossy brochure claims a larger body will be able to ‘carry extra influence with governments’. But this didn’t stop the fledgling ACCA securing auditing and insolvency jurisdictions for its members. CIMA has a ‘reporting accountant’ role for its members. Activity Based Costing, throughput accounting, marginal costing and capital budgeting have become more dominant over the years. None of them was brought into existence by lobbying government.

ACCA appeals to accountants’ pockets by claiming it will save #2.5m per year. It has shown little ability so far. Its annual subscription has increased at nearly two to three times inflation. Money has been wasted on legal follies. Much more could be needed for Swinson’s elaborate governing structure, and nationalistic foreign countries may want local not UK institutes.

Could this potential loss of revenues be the real reason for the ACCA bid?

All this talk of ‘super mergers’ is an unnecessary rearguard action against what accountancy and audit really need and hopefully will get from this government: effective, independent regulation to assert public interest rather than strengthen vested interests.

Austin Mitchell is Labour MP for Great Grimsby.

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