View from the House - Austin Mitchell

The massive changes which our economy and society have undergone pose fundamental questions about the art and craft of accountants.

The idea that an individual accountant is a black-suited professional who exercises judgement and accepts responsibility for his or her decisions has been eclipsed by the corporate mentality.

It is now firms, instead of respected individuals, which give audit opinions and manage insolvencies.

An age of cyberspace banking, global markets, instantaneous money transfer and fraud requires reflective accountants to develop new systems and controls.

Yet, ordinary accountants are herded into trade associations and firms.

They are told how to write an audit report, engagement and management letters and how to decide whether something is an asset or a liability. The idea that they exercise judgement has gone. That might be too expensive. Audit and programmed formulas come cheap and judgement has been replaced by processing.

Accountants are processed too. They are brought up on a diet of standards which encourage conformity at the expense of creativity and are rewarded for compliance rather than innovative thought. They are reduced to footsoldiers with the main order to ‘do it cheaper’.

A self-appointed elite draws up accounting and auditing standards, practice regulations, ethics and everything else. They develop technical answers rather than solutions and avoid anything that deals with root causes.

Their own ‘specialism’ is itself a problem because it prevents issues from being seen in a broader perspective. Thus endless layers of specialists have created numerous committees, each requiring more and more resources.

None seems to find any durable solution.

Sadly, this new robotism has not brought accountants public respect.

Indeed, the more technical the accounting and auditing standards, ethics and regulations have become, the more they have failed, bringing ever more public disquiet. Perhaps accountants should begin to ask some questions – particularly about the way they have been governed.

Austin Mitchell is Labour MP for Great Grimsby.