The FT has reported this morning that:
The UK accounting regulator has been accused of a “shocking” lack of transparency after it emerged that it has avoided giving full responses to nearly 90 per cent of the Freedom of Information requests it has received since 2013. The Financial Reporting Council has answered just six of the 51 FOI requests it has received since 2013, according to its own disclosure log.
Amongst the questions it has refused to answer are ones on whether any of its staff have been seconded to the “big four” accounting firms and vice versa and its investigation into the role of KPMG in the collapse of the defunct lender HBOS.
My friend and occasional contributor to this blog, Atul Shah, who is professor of accounting at the University of Suffolk, was reported by the FT as saying that the number of FOI requests that are deemed to be outside the scope of the regulator's remit was “shocking” and was noted as adding:
This shows there is a real problem within the soul of the FRC. It is a public regulator and not a private members club, and it [has] clear duties of transparency, accountability and reliability which it has been avoiding over many years.
A public regulator should have duties to respond to public queries. They have been fobbing them off, not just once or twice but over a long period. That is really shocking. It beggars belief really.
I agree with Atul. We are in the quite absurd position that in this country the regulation of accountancy has been outsourced to those being regulated and (you couldn't make this up) those responsible for delivering accountability are refusing to be accountable for doing so.
It really is time for the UK to have a proper, state-run, accounting regulator that is wholly independent of the profession and accountable to both a minister and the public who depend upon it.
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Richard,
I note that so far there has not been a single comment on this piece; and there is part of the problem. Nobody is interested.
More generally, I believe the problem is more fundamental. Regulation as designed in the UK, in all virtually all sectors, is deliberately either designed to fail, or executed in a way that ensures its failure. Almost all regulators in the UK, sooner or later, become the prisoners of the industries they regulate; other examples? Financial Services Authority, Department of Agriculture and Fisheries, no less (remember them?). It is a longstanding British tradition and it goes with the territory. It is the preferred way to ensure deregulation happens, even where the British people are not persuaded that deregulation is a good idea. This solution has always proved politically foolproof.
You may be right
But I think a small group of us are winning on this one
The FT and others would nt be commenting if not
In some ways this matter of regulation and regulators in the UK is a very important issue, but its importance is insufficiently understood.
Meanwhile, I have noted wearily the amount of effort (and hot air?) expended in the comments section here, on the travails of the Labour Party and its current credibility, or its approach to tax; hopes and expectations that are, in my humble opinion, a complete waste of effort; and fairly obviously a waste of time. It is only because of Jeremy Corbyn’s ambiguous (?) attitude to Brexit that this Conservative Government; probably the worst – and certainly the least talented, witless and most embarrassingly incompetent for any vaguely rational observer to witness – at least since the war (and that is saying something); could could conceivably have survived without him at the head of the Labour Party. That just seems so obvious. I am genuinely baffled that almost nobody seems to notice this, but plods on optimistically, against all the odds, and rapidly expiring time and opportunity; vainly expecting something to ‘turn up’, and save us all from calamity.
I disagree that “no-one is interested”. I think it’s far more to do with no-one quite knowing how to deal with it. We have a system in place; one sends off one’s letter…. and nothing happens. Another is sent… loop while true.
Where, exactly, does one go from there? Clearly we could do with an “independent” (pardon me while I laugh derisively) body to force these departments to toe the line. Equally clearly, not going to happen, especially with a govt who rides rough-shod insofar as they can get away with it, and often further.
But I do agree with John Warren that the importance is underestimated. “Use it or lose it” – but who has the time to dedicate to chasing the countless failures?
As far as “plodding on optimistically”, I don’t think many are doing that. There are many who, whilst preferring to Remain, will go with Labour’s policies because there’s really no other option. What would you suggest they do?