Dennis Howlett is an independent consultant, blogger, ex-accountant and writer.
He understands tax evasion – just ask him about being paid in gold bullion – which gives him a solid insight into the role of the Big 4 in business today.
Like me, Dennis has serious doubts about the quality of audit work being done by some of the biggest names in the industry. How many times can industry players get away with blaming the client? Isn’t it their job to audit the client? And yet the UK government allows for limited liability…
When even the most basic maths is apparently being jettisoned, with no sense of balancing debits and credits, we should probably worry we’re in the bubble zone. Dennis says:
And for those that might think I’m being over dramatic – Andersen got killed for far less. And KPMG is only alive by virtue of paying a huge fine in lieu of being stripped of its ability to practice in the US. What price the collective incompetence impact of the Big 4 on the remainder of practices that try and serve their clients in the best way possible?
Given that financial services, and particularly mergers and acquisition-driven shareprice increases, combined with absurdly low interest rates and outrageous gearing, are pretty much the only things driving the UK economy at the moment, this is a far from academic discussion. A country can’t survive if it can’t collect taxes, neocon economic theory notwithstanding, especially when it begins to accelerate the sale of core national assets, such as R&D.
But we’re not just talking about a UK problem. The world economy is ever more connected, which increases risk and the problem of systemic shocks to the system. Compliance has to be about more than ticklists. It must involve serious and substantive time and effort. You can’t have compliance without trust. You can’t have compliance without ethics. This is about people not process.
UK company directors like to claim that the voluntary compliance approach used here works more effectively that a system like Sarbanes-Oxley. But then they would say that, wouldnt they?
On the other hand, when car mechanics can get better hourly rates than lawyers, something probably has to give…
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