John Griffith-Jones: They'll say he lacks an undertaker's charisma, but he'd be buried alive in a financial scandal

Non-stop travel, the fallout if there's another Enron, the fight to recruit staff... Accountancy ain't dull, the head of KPMG tells Simon Evans

What's the definition of an accountant? Someone who solves a problem you didn't know you had in a way you don't understand.

When does a person decide to become an accountant? When he realises he doesn't have the charisma to succeed as an undertaker.

The list goes on and on. Suffice to say, accountants cannot lay claim to the adoration garnered by many of the country's less arduous professions.

As head of KPMG's 10,000- strong UK operation, and soon- to-be co-head of the firm's newly integrated European business, John Griffith-Jones has heard them all over a career spanning more than 30 years.

Griffith-Jones, who studied at Eton and Cambridge, completes his first year at the helm of the UK's third-largest accountancy group tomorrow.

"Well I'm still here and I'm still smiling," says the self-confessed antagonist who relishes an argument. "It's harder to turn off the Blackberry at the end of the day but I certainly don't miss the day-to-day of before."

That Blackberry is likely to go into overdrive in the coming months as he flies back and forth to KPMG's headquarters in Germany to preside over the amalgamation of its European business. He also has to keep an eye on investigations into bribery allegations at Siemens, the giant German engineering giant. Lawyers are digging into KPMG's performance as auditor to the group.

The travel schedule also makes rather a mockery of the company's green credentials. Griffith-Jones' carbon footprint is certain to be Yeti-like in a matter of weeks with his visits to Frankfurt.

"We have really big clients that operate across European borders so it's right we should do the same," he explains. "To be frank, I think that the accountancy profession has been slow to react to the European agenda, which has given us a chance to steal a march on our rivals."

Although he denies any interest in vying for the top spot among Britain's "big four" accountancy groups, it clearly rankles with him that KPMG languishes in third place.

But he's happy to put competitive differences to one side to defend the much-maligned British accountancy industry, which has suffered in the wake of global scandals such as Worldcom and Parmalat.

"Did public opinion of the profession suffer? Yes, it did," says Griffith-Jones. "But did we ever lose the confidence of our clients and the City? I don't think so. People need to remember that Enron etc didn't happen in the UK. You have to go back a long way to find an accounting scandal in Britain. The City and its regulators realise what an asset the accountancy profession is to this country."

But with the pressure of more complex financial products and systems to audit, surely the strain on the likes of Griffith-Jones, who would ultimately carry the can if a scandal emerged on his watch, is intensifying?

"Sure, it doesn't get any easier," he says. "There's a lot of pressure on audit partners these days. But that's why they get paid well. The whole place moves to the drumbeat of avoiding mistakes."

But like anything in life, you get what you pay for, and the principles-based approach preferred by the British regulator, as opposed to the prescriptive Sarbanes-Oxley regulations in America, means a blow-up can never be ruled out.

"One doesn't expect planes to fall out of the sky but they do," says Griffith-Jones. "And one certainly doesn't expect the police to solve 100 per cent of crimes, so why should accountancy be any different? We have to accept that we take on board some incremental risk for not having the same controls as in America. But would we want what they have? I don't think so."

He concedes that treading the fine regulatory line is a tricky task for the Financial Services Authority (FSA) and that "they've probably got it about right – they've played a subtle game". But he senses a degree of regulatory creep could be on the cards: "There always seems to be the temptation to write another rule – certainly some regulation is rather too prescriptive."

While not within the scope of the regulator, accountants also face growing complexity in the shape of Treasury-prescribed tax rules, and that is another bugbear for Griffith-Jones.

"It's important to remain competitive and that doesn't necessarily mean having the lowest tax regime," he argues. "But we can't let things drift. Complexity is clearly a major issue. I do worry about it."

Griffith-Jones also worries that the changing landscape of the traditional accountants' client base could have an effect in the coming years too.

"We've seen the growing influence of China, India and Middle Eastern corporates of late," he says. "And, sure, there's a premium of being first into market for these clients; I know there's only four of us but that's plenty for a fight. However, there's a real risk in all this. These companies won't be coming to London for ever, paying the high-cost economy fees. Look at the rise of Shanghai and Mumbai. Their end goal will to set up their own infrastructure and that could have a potentially long-term squeeze in this country."

With adherence to the weighty regulations and rules in Britain comes expense, and Griffith-Jones takes every opportunity to bemoan the high-cost structure of UK plc.

"The cost argument for moving jobs to cheaper locations is clearly there," he says, responding to insurer Prudential's recent launch of a pilot scheme that could see the roles performed by many of its City-based accountants shifted to India.

"But in those value-added roles of audit and financial advice, I think it's much more difficult to transfer them across. It's still crucial to eyeball the finance director and you can't do that when you're thousands of miles away. We've got the highest-quality profession in the world but, yes, it is expensive."

A large chunk of that expense comes in the recruiting sprees that KPMG embarks on each year, courting the UK's top students at universities up and down the land in the "milk round". It's a more and more competitive space, with those star graduates being lured to other careers in investment banking, hedge funds and private equity.

"These things are cyclical," says Griffith-Jones. "It's not as if we pay people nothing. Maybe we aren't the number one choice sometimes, but it's easy to get sucked in by headlines. You don't read about those people in a hedge fund or a private equity firm who make it halfway up. I think we are pretty good at spotting the talent who'll fit in here."

And once you've managed to recruit a top student, holding on to him or her after you've ploughed thousands of pounds of investment their way is crucial. Rival accountancy giant Ernst & Young recently revealed that it was piloting a scheme to let some of its staff choose their own holiday time in an effort to be more flexible, recruit new people and hold on to those staff who may be mulling departure.

"Our retention rates are excellent – better than our competitors," claims Griffith-Jones. "If your only asset is your people, you'd be pretty stupid not to look after them."

He balks at the suggestion that he may be out of tune with those new recruits who could be seeking something different from a job that he began back in the 1970s. "The tone from the top is very important – the culture of the business is very important," says Griffith-Jones, in almost schoolmaster-ish tones. "After 30 years here, I think it would be pretty difficult for me to be culturally out of tune."