PracticeAuditA shaky Foundation

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.

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