Sir Peter Kemp – A case of double standards

Gerry Acher of KPMG writes a rather disingenuous letter to the Financial Times about the government’s proposal to raise the statutory audit level.

Peter Williams writes a more straightforward piece in Accountancy Age on the same subject (10 June). Their contributions put one in mind of the general question of regulation versus deregulation, and where the line should be drawn, and how the debate should be conducted.

All public administration consists of balancing interests. But in many areas of regulation there is real tension between people who, in theory, agree with regulation but in practice often cannot quite see why it applies to them.

We can all sign up to the notion that skips should be lit and licensed, but we can’t understand why we have to get a bit of paper from the council when we need one. We recognise the tragedy of BSE, but we do like to have beef on the bone which has never done us any harm.

Dangerous dogs are dreadful, but not our Fido.

The second point is that all regulation was right at the time, but that time moves on. Existing regimes always need review. And so we return to Messrs Acher and Williams. The former purports to support consultation, but actually signals straight opposition.

The latter is more honestly opposed. But both are wrong.

Perhaps there was a time when small firms needed an audit compelled by the State. But surely no more. Audit is an expensive overhead. If small firms find one useful, they can buy one, and they can do the same if, for instance, their bankers insist.

If audit was a really useful function, state compulsion would not be necessary.

We have here cries from the producers’ lobby – Messrs Acher and Williams write like old-fashioned shop stewards on behalf of their members. But the real tragedy is the way they support the notion of double standards. Both these writers and the people they may represent are probably the first to cry for deregulation in very many other areas. But not when it comes to themselves.

Sir Peter Kemp is chief executive of the Foundation for Accountancy and Financial Management.

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