A open and closed case

A open and closed case

UK firms have a good reputation around the world for their reporting, but it looks like they may be about to forfeit it

Despite not being public companies, accountancy firms issue public reports
that provide mostly excellent disclosures about what is going on, how much
profit they make, and from which service lines.

The problem now is that, as far as the UK is concerned, that information
looks set to become drastically worse.

While nobody would question KPMG and E&Y’s decisions to form closer
unions with fellow firms in their networks on reporting grounds, it looks like
the UK profession will in future find out less and less about what the two firms
are doing in the UK.

Both have suggested they will publish merged numbers, and have made no other
pledges on their UK reporting.

In accordance with LLP rules, KPMG and E&Y will still report their UK
results to Companies House. But there
will be a long time lapse between the firm’s year end

and the public disclosure of those numbers, and the information is likely to
be less wide ranging.
Does it matter? Well, there are good reasons why there is a public interest in
the information. Auditors perform a public function, and the public should know
what is going on.

Perhaps we should be grateful ­ if the firms were still partnerships, we
would get nothing. The FRC’s Murray committee is looking at what it can do to
improve governance at audit firms. Some have questioned its relevance, but this
could be something worth it looking at.

Better still, for firms and companies generally, why not go the whole hog,
and get the IASB to introduce country-by-country reporting?

Alex Hawkes is the news editor of Accountancy Age

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