Profession is 'complacent' warns Sharman
One of the accountancy world's most senior figures has accused the profession of extreme complacency following the Enron scandal and called for government-backed regulation.
Lord Sharman, formerly KPMG’s international chairman, hit out at the way accountancy was regulated, saying it was no longer acceptable for the key regulatory body to be funded by the very firms it sought to regulate.
‘The game has changed, and post Enron it is very different from what has happened before, but every response from the accounting establishment has been complacent in the extreme,’ he told Accountancy Age this week.
Sharman is calling for the newly created Accountancy Foundation to be publicly funded by the government to avoid any conflicts of interest.
‘Anybody that pays for something has some measure of control over it, not least that they can refuse to pay for it if they don’t like what it is doing,’ Sharman told Accountancy Age.
The Foundation is funded by the six accountancy institutes of the CCAB, which in turn are paid for by their members and firms.
Colin Reeves, head of the review board at the Foundation, said he was confident there were sufficient ‘buffers’ in place to avoid conflicts of interest.
But he conceded state funding would give a clearer perception of independence.