Just who the heck is running the profession?

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Dennis Howlett has asked:

Much more important though ... Just who the heck is running the profession? We know FASB is financed by the profession in the US but it seems the SEC can over-ride or ignore it when it is under pressure from the Fed. In other words it is the Fed that's setting the rules and not the profession nor the oversight authorities when conditions suit the Fed. Is that right?

Dennis is right to ask this. It's a question Prem Sikka asks often, of course, and is that of the accountability of accountants in creating accounting standards.

The structure and accountability of the International Accounting Standards Board is absurd, as is the logic underpinning it, so often expressed by Sir David Tweedie who frequently threatens bodies such as the European Commission (who have translated his ideas into international law) to ensure they do not interfere in what he clearly sees as a private law making process on behalf of the Big 4 and their corporate clients.

This is wrong though; fundamentally wrong. Accountability is part if the democratic process. Governments created companies by passing the legislation that allows them to exist. Those who own them and promote individual entities come second in the pecking order of significance. Accountability to the state that grants the licence to operate, and its citizens, can and should come first. So political control of the accounting process is essential, even if one done through consultation, cooperation and negotiation. Anything less than political control is wrong. The alternative is the madness inherent in Boris Johnson's latest plans for London where he wants to take the City out of democratic accountability, and the madness of the tax plans of many of the professional institutes who want tax law pre-vetted by them to likewise take that out of democratic control.

We have a fundamental choice here: a choice between holding key parts of our economy to account under processes of democratic control, or of ceding that control to wholly unaccountable elites.

I'm a democrat. I know where I stand. I wish the profession could be so clear in its support for he democratic process. But it is not. It is another example of their wishing to undermine the democratic process that has underpinned our current well-being, and which could destroy it. They act fundamentally anti-democratically on tax havens. This issue of control of accounting is similar. It worries me. A lot.