Westminster Outlook One quote above all others comes within the width of a wispy whisker of making the staid world of bean-counting sound really rather exhilarating, if a little bloodthirsty: "An accountant is a man who watches the battle from the safety of the hills and then comes down to bayonet the wounded."
What an equally apt description that would be of those cavalier Conservative slashers of the state who would like to finish off the parts of the public sector that have been crippled by the financial crisis.
Perhaps this explains why so many accountants won seats at the 2010 election – a time when number-crunching was needed in government more than at any time since the economic reforms of the 1980s. Four years ago, 17 professional accountants were returned as MPs for the three major parties, with 13 of them Tories – or 76.47 per cent if you're a statistician (read: accountant without the laughs). That's more than double the number of doctors, dentists and opticians combined, which is surely both a net and a gross debt for our elected chamber.
Nevertheless, you would have thought the wealth of balance sheet brainiacs would prove to be assets in sorting out the Treasury's books and ensuring that government suppliers were prevented from pilfering parlous taxpayer coffers. Alas, nearly seven years on from the credit crunch, Britain's recovery is nascent at best. G4S's £108.9m repayment this week over the electronic tagging of non-existent prisoners is a reminder that the state has failed to keep checks on private-sector contractors.
OK, it's a bit much to expect the Commons' bean-counters to have brought peace to such volatile territories. But, as one Tory minister told me, these MPs could at least have a quiet word with their central offices and warn them that the parties accept far lower auditing standards for their own annual accounts than have now been demanded of listed companies in the City.
The Electoral Commission database shows that the three main parties have been using the same accountants since 2002. Labour has been audited by Crowe Clark Whitehill and its predecessor, Horwath Clark Whitehill, while the Tories have used BDO and the Lib Dems rely on Mazars.
The Competition Commission recently blasted the City for being too close to its auditors, with many accountants benefiting from century-long relationships with major corporates. An inquiry concluded that FTSE 350 firms would have to put the auditor role out to competition every decade, while Brussels is banning accountants from holding an audit for more than 20 years. Forcing refreshment of auditors will, it is hoped, ensure that they are not in a position where they might turn a blind eye to financial irregularities in order to maintain lucrative contracts.
This has proved a catalyst for the Big Four – KPMG, EY, PricewaterhouseCoopers and Deloitte – to play musical chairs. For example, PwC is to be dumped by Barclays after 120 years of checking the bank's books, but has replaced KPMG at HSBC.
Nevertheless, the hope, ultimately, is that the second tier of accountants will eventually break the stranglehold of the four biggest auditors as more regular rotation fosters greater competition. This raft of hungry auditors includes the Conservatives' BDO and the Lib Dems' Mazars.
In fairness to BDO, the firm has gone through a retendering process with the Tories and won the account again. However, it seems bizarre that political parties should be held to a lesser standard than the City – particularly when there is so much potential for conflicts of interest.
Prem Sikka, professor of accounting at the University of Essex, points out that ministers from these parties, when in government, inevitably dish out multi-million-pound contracts to accountants.
Even in opposition, they use the consultancy wings of what are really today financial mini-conglomerates to help them evaluate and devise policy.
It is difficult to see what authority politicians can have over the City unless they hold themselves to a higher standard. I think political parties should have to put the audit role out to competition every five years, but not allow an incumbent to bid again after 10 – tougher than both the Competition Commission and EU rules.
This might seem unfair given that the existing auditor may have done an excellent job and understand the parties' finances inside and out. But we need some detachment from those hired to cast a critical eye over party accounts, even if that means a regular wielding of the bayonet.Reuse content