The involvement of a PwC expert in the political process of reforming European accounting law has prompted fresh concern about links between the biggest auditors and those who are supposed to regulate them.
The Cypriot government borrowed a PwC technical expert to assist it with pushing forward accounting reform during its six-month presidency of the European Union, which began last month.
And as they also note:
One senior figure at another auditor said the arrangement risked opening the door for PwC to influence reform or respond quicker to regulatory developments than competitors.
Mazars, another rival, called for a “thorough review” of secondments by the four biggest auditors — PwC, Deloitte, Ernst & Young and KPMG — to government departments, regulators and accounting standard-setters. “At the very least, increased transparency is long overdue,” Mazars said.
In its defence the FT says:
Cyprus's permanent representation to the EU defended the arrangement, saying it was “common practice for the public sector to engage experts when the necessary expertise is not available in the government”. It said the work of such experts was strictly supervised by the Cypriot government, with “serious consideration” given to conflicts of interest and confidentiality.
In don't buy that. We know PWC seeks to have massive influence in UK politics by donating considerable amounts of time to UK political parties - and others. Mazars concern in this respect is spot on. This is done to secure competitive advantage, I'm sure.
But there's more to it than that. This is also done to block proposals PWC does not like. So, for example, one key proposal PWC has spent much time and effort opposing is country-by-country reporting which is included in the directives on which it is advising. Is it really going to be open-minded and objective on the issue? I doubt it. Nor would I be. But then, I wouldn't represent myself as being so. And that's the ethical difference.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I wonder what you think of PWC’s role in the delivery of significant amounts of aid funding: GBP60 million plus via the Climate and Development Knowledge Network (note the similarity in logos -is this really a subsidy for PWC’s climate change business?) or the GBP300 million fund on education for girls. Or KPMG’s GBP100 million Governance and Transparency Fund, or its Tanzanian Accountability and Transparency programme (yes, Tanzania, where its client, BAE was found guilty of corruption), or its management of the british Aid Watchdog.
My position is simply: these firms have no role in such activities
They create social division and undermine democracy. They facilitate and turn a blind eye too corruption (HSBC’s money laundering was audited, after all)
They should be treated like the social pariahs they are
This is the same argument for retaining a rich elite who can afford to splash around a bit of largesse, if they so wish. God, I remember a friend from a wealthy family giving me this line when she was about 14 – she actually repeated something similar to me yesterday!.