Absolute transparency is the only way forward
When it comes to disclosure of key information, the Top 50 firms are not always the most assiduous of corporate bodies
Take, for instance, the fact that only a quarter of the firms in this year’s
list of the 50 largest will disclose their profits.
Admirably, the Big Four all open the books for us to get a glimpse of the
profits they make. As you work your way down the list, however, reporting of
profits becomes a rarity.
Likewise, the firms are shy of disclosing the average salary of their
professional staff. There are also some curious ways of breaking down fee
income, which means the results can, in some places, be less than transparent.
It is clear with some firms that they change their own breakdowns year on
year, making comparison very difficult indeed, and making it difficult in some
circumstances to grasp exactly what is going on.
This is in stark contrast, of course, to many of their clients, who will have
to post a fairly detailed report of their financial results at Companies House.
There’s a disparity that stands out. Why shouldn’t accountancy firms be more
transparent? What could they have to hide? Why should they have this advantage
when limited companies and plcs do not?
Interestingly, we live in times post credit crunch when increased
transparency is becoming the key issue. It’s embodied in the work of the FRC on
audit choice, and it’s increasingly central to the proposals in the US on the
audit market there. Accountancy firms can show the way here.
The LLPs or most of the LLPs do already, but the other firms can
demonstrate they are aware of the issues and open up much more. If, as a
profession, accountants cannot be completely transparent, there will always be
the perception that there is, dare we say it, something to hide.