The watchdogs over there can hardly rustle their papers without accountants
over here having to rethink the way they do business.
The fact that the UK needs to persuade the SEC to buy into limited liability
contracts places regulators across the pond in an extremely powerful position
over the accountability of financial reporting here.
That Financial Reporting Council chief executive Paul Boyle has to open talks
with the SEC is testament to the enormous influence of its chairman Christopher
Recently I read that the Fed, because of the power of US markets, was
actually setting interest rates for China. It’s surely the case that Cox isn’t
just running US market regulation, he has a hefty role in setting ours.
Having said that I have a suspicion that Cox will give Boyle the nod. I have
no hot line to Cox (sadly he doesn’t do many interviews) but here’s why.
For one thing, it’s a good bet he’ll accept that the deals are between
investors and auditors not auditors and company directors and underlining
the interests of investors is an absolute good. But perhaps he’ll also see it as
an emphatic act supporting audit choice not mere promotion of it. US
regulators, surprisingly, do not baulk at intervention if they believe it is for
the greater good.
Lastly, Cox has endorsed some of Boyle’s work on choice and is seen as an
internationalist. He likes IFRS and wants to see it adopted in the US. He
doesn’t believe all things foreign are un-American. It may be that he’ll see
what we do as something that could be used back home.
Given that he appears to have a de facto veto, giving it a green light might
send strong signals to the US market. In which case he will still have to tread
Gavin Hinks is editor of Accountancy Age
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