PracticeAuditNow it’s time to practice what you preach

Now it's time to practice what you preach

Summer's over and most accountants will be hoping it marks a turning point in their fortunes. Blamed for almost every corporate problem going - some justified, some less so - since the turn of the year, perhaps the upturn begins here.

For now at least accountants have persuaded government and regulators on this side of the Atlantic that not all the industry’s current problems are of its own making. That said, the Big Four especially are very much on probation.

With civil servants already preparing the government’s final report on the future of UK audit, any sniff of a London audit firm failing in its duties and the status quo will not be allowed to prevail.

Thanks in no small part to Peter Wyman (it’s not just his head that has been above the parapet, the ICAEW president has put his whole body very much in the firing line in recent months by insisting there is no endemic problem with accountancy in the UK), ministers currently appear convinced that an eye-catching sweeping reform of accountancy is not necessary.

However, they do want to see non-executive directors play a more active role in policing corporate governance. It’s not surprising.

The only formal investigation currently being undertaken by the ICAEW into the Enron collapse is that being conducted into Lord Wakeham, chairman of the fallen energy giant’s audit committee.

The former Tory minister is too high-profile for regulators to ignore.

And non-execs all over the country will feel the repercussions of the inquiry – whatever the outcome.

Many firms, to their credit, are not acting as though they got off the hook. This week KPMG launched a UK audit committee institute designed to give corporate audit committee members the support and information they need in the post-Enron world.

Meanwhile, the move by Chantrey Vellacott to appoint a non-executive chairman – believed to be the first such appointment by an accountancy firm – is also a step in the right direction.

If accountancy is ever to be restored to anything like its former standing, firms must practice what they preach whether it’s in terms of publishing their own accounts (broken down to country-level, for a market as significant as the UK), or, in this instance, by taking advantage of the insights the right kind of non-executive director can bring.

Related Articles

Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

4d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

1w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter
Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

Audit Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

3m Alia Shoaib, Reporter