Last week’s announcement of a new regulatory regime for accountants is a watershed. Almost a decade after the series of major audit failures which brought the profession into disrepute, trade minister Ian McCartney was right to insist that 60% of seats on all the key bodies should be reserved for lay members. Enough elements of self-regulation remain to enable those who wanted professional majorities to save some face. They should now follow the example of the plan’s architect, Chris Swinson, and quietly abandon arguments that have done the profession no good at all.
Public opinion is squarely behind giving a greater voice to consumers.
Yet some senior accountants argued until the last ditch that lay people could not possibly hope to understand the finer points of professional ethics. How, they asked, could a lay regulator judge an auditor’s conduct in a tight corner if he or she had never been there themselves? Such arguments miss two points.
Firstly, lay members are hardly likely to be manual labourers. Without doubt, they will be senior business figures, well able to understand the principles of accountancy. Secondly, good regulation is not about sympathising with a fellow professional. It is about making intelligent and impartial judgements between right and wrong. Rebuilding public confidence in the profession’s ability to regulate itself will depend on showing that it can work with independent outsiders to do just that.
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