A shaky foundation
We learn this week the new accountancy watchdog, the Foundation, will be fully operational by January. Wasn’t that January 2001 you might ask?
Or, as those of you with longer memories might suggest, January 2000?
Well, no. Those deadlines have passed and the new target put in place this week might be met with a certain degree of justifiable scepticism.
More than two years have passed since Lord Gordon Borrie QC, former head of the Office of Fair Trading, was appointed chairman of the Foundation.
That came only after years of negotiations between accountancy bodies and government to end decades of self-regulation.
After that 1 January 2000 deadline was missed we were told the new regime would be up and running by the end of that year. But delays blamed on indecision over funding and constitutional policy meant little happened.
Finally the make-up of the new regime was revealed this July, a welcome breakthrough. But still the powers of regulation rest with the existing institutes.
This really isn’t good enough. With a requirement to include a majority of lay members on each of its bodies, the Foundation was supposed to be a blow for independence: a chance for accountancy to prove it is whiter than white and willing participant in a modern professional regulatory regime.
But delays are tarnishing its image even before launch. Regulatory power has not yet passed to the Foundation. Until it does so, accountancy risks being seen as protectionist. That will only invite further scrutiny from government. And with that comes the risk that accountancy will have less say in its regulatory future.
Will Project Darwin evolve?
Ever since the bulk of the Big Five began moves to divest themselves of their consulting arms, accounting firms have run the risk of seeing themselves cast as tickers and bashers once again.
It may not be the case, but you could forgive the layman for asking that without business consultancy services what is left for accountants apart from tax and audit?
But it’s good to see KPMG insiders acknowledging the problem as they seek to roll out Project Darwin, a project that appears a sound attempt to remove unnecessary tiers of management by automating internal authorisation processes and fostering an entrepreneurial spirit.
With a budget of #16m, the firm is putting its money where its mouth is. It will take more than that to maintain accountancy’s position as a premier career choice, but it’s encouraging nonetheless.
UK senior partner Phil Verity has been elected for a second term at Mazars
Tallat Mahmood appointed to corporate finance team of Top 20 firm
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes
Top Ten firm RSM has appointed Nick Blundell as its head of corporate tax in Birmingham