Outlook: Maxwell ruling

THE ACCOUNTANTS Joint Disciplinary Tribunal has clearly been taking prose lessons from some of the newspapers once owned by the late Robert Maxwell. Phrases like "The firm lost the plot" do not fall easily from the lips in such a dry profession. And yet that is exactly what Coopers & Lybrand Deloitte did when it came to the auditing of the Maxwell empire. Judgements do not come much more damning than that of the JDS - in particular its conclusion that Coopers left its objectivity and scepticism outside the door when it entered the Maxwell lair.

It would be nice to think that auditors, like law firms, are nothing if not objective when dealing with clients. Sadly, the lure of fat fees makes it all too easy for them to become part of the process rather than a natural check on corporate excess.

PriceWaterhouseCoopers is standing by the four senior partners singled out by the JDS on the grounds that they were "victims of deliberate deceit" as if this were something auditors should not be on the lookout for.

PwC has already salved its conscience by helping bale out the pension funds plundered by Maxwell while the pounds 3.5m in fees and costs levied by the JDS, though a record sum, represents a mere flea bite for the world's biggest accountancy firm.

More serious is the damages claim that PwC's 8,500 partners face from the receivers of the Maxwell empire. But it will be a miracle if this ever reaches court and even then, the big five accountancy firms have a mutual insurance policy to deal with embarrassments like this.

The acid test is whether the JDS's admonition prevents another Maxwell scandal. A more effective sanction would have been to make an example of those partners involved.

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