Regulation for the regulators

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The Independent Online
The accountancy profession's latest attempt to persuade the world that it is capable of regulating itself has been characterised by farce and tragedy. Open hostility between different camps has been matched by the even more horrifying sight of an organisation patently misunderstanding - wilfully or otherwise - its own agenda.

Last week's announcement, of detailed proposals for a review board to supervise the regulatory and disciplinary activities of the leading accounting professional bodies, follows a general loss of faith in the abilities of auditors, after the corporate collapses early in this decade. Moreover, there has been a lack of conviction that the system is robust enough to crack down on those found to be wanting.

Most of the six organisations that make up the Consultative Committee of Accountancy Bodies have suggested reform at some time or other, but none appear to have been able to reach more than tentatively for the nettle of independent regulation. However, Chris Swinson's agile mind has bypassed that question altogether: his suggestion opts for independent regulation of the regulators.

Mr Swinson, chairman of the working party that reported in such strange circumstances last week, realises that his fellow members of the Institute of Chartered Accountants are unlikely to agree to their regulatory powers being handed over to another body, but may be persuaded to allow yet another committee of "the great and good" to oversee its efforts.

Other bodies had different propositions: the certified accountants, for instance, were once in favour of setting up a General Medical Council- type body to look into complaints of misconduct. But all were apparently won over by Mr Swinson's bonhomie and clever word play - except the Chartered Institute of Management Accountants, who were about to form a union with their chartered brethren, until the latter's country cousins called a halt.

Originally, it seemed as if the management accountants' reservations were minor. But last week, in the hands of senior vice-president Norman Lyle, they became so serious that it is a wonder a fight did not break out. Indeed, it would not be surprising if the organisation pulled out while the other five bodies, including the public finance organisation and the Scottish and Irish chartereds, pressed on with an initiative designed - in the words of the accountancy academic Prem Sikka - to "appease" an incoming government. Mr Sikka says the tactic "will not satisfy anybody". Some accountants are inclined to agree with him.

The idea is that the review board be owned by an externally funded new organisation, the Foundation. However, Mr Swinson and his colleagues admit that nobody has rushed to finance their grand idea, and anyway they are so committed to it that the accountancy bodies will pick up the tab. But how independent will that look to the public?n

Roger Trapp

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