Tuesday, October 27, 2009

Don't forget the accountants

From Nick Mathiason in The Observer:

"As bankers take a kicking from an increasingly irate public, auditors have avoided the anger, even though they signed off trillion-dollar balance sheets, sanctioned increased dividends in bank shares that collapsed months later, blithely assumed markets would function seamlessly and established controversial rules that inflated bubbles and amplified losses.

It is why one fund manager dubbed the profession an army of Morlocks – the fictional troglodyte characters from HG Wells's Time Machine who spend their lives underground, away from the light."

We ignore this profession at our peril. Apart from a few like Prem Sikka and Richard Murphy, few public commentators have taken the time to look deeply into this business, which is one of the most important on our planet. Protest against the likes of ExxonMobil, Wal-Mart and Trafigura by all means - but the time has come to start looking at the ones that unite all these disparate corporations: KPMG, PricewaterhouseCoopers, Deloitte & Touche and Ernst & Young.

Now this is interesting:

"the Observer understands one European government has launched a scoping exercise to establish whether it is possible to sue the profession in one hit. Any such action, it is believed, would be on the basis that accountants took the lead in regulating themselves, setting international standards while also advising audit clients, and so are partly responsible for the financial mess."

Well, well, that would be a step forward.


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