Outlook: Accountants are slow to judge

Click to follow
THERE ARE very few examples of self regulation left these days but one surviving outpost of the old way of doing things is the Joint Disciplinary Scheme operated by the accountancy profession. Post the great fraudulent collapses of the late 1980s and early 1990s - Brent Walker, Maxwell and Polly Peck, to name but three - the accountants too have felt the wolves at their door. Procedures and disciplines are being overhauled and tightened up, and so far the JDC has managed to keep the politicians at bay. Even so, the accountants seem to have a problem when it comes to hanging members of their own profession, and their disciplinary proceedings remain under close public scrutiny.

Six and a half years after Robert Maxwell fell off his yacht, the JDS finally announced yesterday that it was proceeding to tribunal with a number of unpublished findings against Coopers & Lybrand, the firm that audited most of Maxwell's interests. The nub of the complaint is that by August 1991, three months before Maxwell died, the firm should have had sufficient evidence of fraud and malpractice to warrant either resigning as auditor or alerting the authorities. Most of us would find this a far from revelatory finding. How could it have taken the JDS so long?

To be fair, the JDS does seem to be going a bit faster than some of its statutory counterparts. The Department of Trade and Industry report into the flotation of Mirror Group has still to see the light of day. Furthermore, civil proceedings over the collapse and the emergence of a conflict of interest meant the JDC's investigation didn't get properly under way until 1995. So maybe it isn't doing too badly. All the same, Chris Dickson, executive counsel to the JDS, must be acutely aware of the criticism of slowness.

Meanwhile, it is the unfortunate lot of Coopers and Lybrand that this has become something of a show case. The accountants have to demonstrate that self regulation can work if they are to defend their system. Coopers and the four partners the JDS has chosen to nail to the cross can therefore expect the harshest penalties to be imposed should the case stick. And because proceedings before the tribunal continue for the time being to be held in private, the public isn't going to have much confidence in any outcome other than guilty as charged. Self regulation may have its virtues, but for obvious reasons, it can be prone to bad justice.