Accountancy reform 'does not add up'

Published on 1/29/2003

Government plans to reform regulation of the accounting profession in the wake of Enron-style conflicts of interest were attacked last night by Unison, the leading public sector union.

Ahead of today's announcement by the trade and industry secretary, Patricia Hewitt, the union complained that the "big four" accountancy firms have "stitched up" the private finance initiative (PFI) and public private partnership (PPP) which provide private cash for major public projects like schools and hospitals.

A previous report from Unison found 45 examples where the main accountancy firm acted as financial advisers and auditors on major public authority projects - the kind of conflict of interest which Ms Hewitt is seeking to curb in the private sector.

Today's proposals are expected to merge the financial reporting council with the accountancy foundation, the current watchdog body, and strengthen its monitoring functions. But it will remain funded by the industry itself.

A Unison report claims there is a revolving door between the big four and government. Ms Hewitt once worked for Andersen Consulting, the management consultancy arm of the now defunct global accountancy firm in the Enron affair.

"Ministers, ex-ministers, MPs, and civil servants have all been in the pay of these firms who, in turn, provide secondees to government and sit on key working groups. The big four devise, develop and profit from PFI policies," Unison says.

Courtesy of Daily Guardian