Bean counters must be held to account too

 

Outlook Should the accountancy profession be running scared of its regulator? Only if the bosses of the big-four audit firms take flight at the prospect of being slapped by a piece of wet lettuce.

The Financial Reporting Council (FRC) has just unveiled its plan and budget for the next year, and the announcement encapsulates where the organisation is going wrong.

Now remember, the FRC is the body that oversees the UK Combined Code on Corporate Governance which operates on the basis that companies either comply or explain to their investors why not.

The FRC says it wants companies that don't comply to offer better explanations and it wags a stern finger at how accounts are presented while saying that disclosures are often confusing and poorly set out.

In that case you'd think it would be setting an example with its own disclosures. Yet despite the FRC moaning about pressures on its budget in its announcement, it somehow manages to omit what its budget will actually amount to. It also fails to explain what a 25 per cent increase in audit inspections means in practice.

For the record inspections should rise to 125 from 100, and the budget from £27.2m to £32.1m. The information can be gleaned only by picking through the broader, 32-page plan and budget document, supplied as a PDF file.

The "plan" part of that file has the tone of a mildly disappointed schoolmaster telling a pupil he could do with trying a bit harder.

Given how the financial crisis shook public confidence in the audit profession you'd hope for a little more meat on the bones.

But should it be a surprise this is lacking? Look at who's running the organisation. Its chief executive, Stephen Haddrill, is an ex-civil servant turned trade-body boss (the Association of British Insurers).

His chairman, Sir Win Bischoff, is a former investment banker, Lloyds Banking Group chairman and a pillar of Britain's financial establishment. He is just about the last person you'd expect to see riding roughshod over the auditors he's spent so much of his life working with.

It's worth noting that these men aren't the sort you would expect to see at, say, America's Public Company Accounting Oversight Board. They tend to be rather eminent lawyers who have worked in rather eminent institutions and have had regulatory responsibilities in the past. It's also overseen by the Securities & Exchange Commission, not known for its lightness of touch, and was established after the Enron scandal.

The events of the financial crisis which led to the FRC taking on an expanded role were no less scandalous. So too is the FRC's tepid response to the fallout from them.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?
Season's finale brings the end of an era for top coaches and players across the continent

The end of an era across the continent

It's time to say farewell to Klopp, Clement, Casillas and Xavi this weekend as they move on to pastures new, reports Pete Jenson
Bin Laden documents released: Papers reveal his obsession with attacking the US and how his failure to keep up with modern jihad led to Isis

'Focus on killing American people'

Released Bin Laden documents reveal obsession with attacking United States
Life hacks: The innovations of volunteers and medical workers are helping Medécins Sans Frontières save people around the world

Medécins Sans Frontières's life hacks

The innovations of volunteers and medical workers around the world are helping the charity save people
Ireland's same-sex marriage vote: As date looms, the Irish ask - how would God vote?

Same-sex marriage

As date looms, the Irish ask - how would God vote?
The underworld is going freelance: Why The Godfather's Mafia model is no longer viable

The Mafia is going freelance

Why the underworld model depicted in The Godfather is no longer viable