The following notice has just been published by the Financial Reporting Council:
The Financial Reporting Council (FRC) today publishes the decision of the Appeal Tribunal following an appeal by Deloitte & Touche, who were advisers to MG Rover Group, and Mr Maghsoud Einollahi, who was a partner at Deloitte & Touche.
The FRC notes that the Appeal Tribunal has upheld several findings of misconduct in relation to Deloitte's work on ‘Project Platinum', the project to dispose of the MG Rover loan book.
The Appeal Tribunal granted the appeal against other findings including those in relation to ‘Project Aircraft', the project to realise the value of tax losses within MG Rover Group.
The Appeal Tribunal comprehensively reviewed the need for accountants to act in the public interest and agreed that accountants should take this into consideration in deciding whether to accept or continue an engagement. However it felt there was a lack of clarity in the ICAEW's guidance for accountants on how they should do that. The FRC will continue to work with the profession to address this issue.
The appeal relates to the collapse of MG Rover years ago.
The point that is most important to me is in bold. I wrote very recently on this blog that:
[T]hat in effect professional associations provide no useful guidelines to their members on how to balance their duty to the public against their duty to their clients.
and
It is reasonable to assume as a result that most accountants have an under-formed or absent sense of what the pubic interest may be.
A couple of days later that is officially confirmed to be true.
The accountancy profession really has a lot of thinking to do.
They know my number.
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You often have some good points but your credibility is non-existent as you have a binary view of the world, can never accept you are sometimes wrong, and you are insufferably arrogant.
And, in anticipation of your response that if I feel this way I should no longer read your blogs, this blog has finally convinced me to do just that. (And by the way, I have no connection nor support for accountants).
I hope you’re happy in your certainty about everything.
You are free to make your choice
As to my credibility – that is for others to judge
But as a matter of fact the ICAEW do talk to me, quite often
Excuse me but instead of wading in with a load of insulting remarks, why don’t you respond to the above on a fact by fact basis?
Byeeeee!
Richard, as you know IFAC has also been trying to define itself (i.e. what a “professional accountant” is) since 2010.
James Gaa, who is driving the IESBA review at this time, was interviewed recently and focused on the “public interest” issue.http://www.ifac.org/news-events/2015-01/we-are-iesba-interview-james-gaa
James says: “I think one of the factors is more attention and interest in regulatory oversight and legal requirements. That impacts the Code, of course, and the Ethics Board. It also increases our visibility and the importance of demonstrating our commitment to the public interest.”
TI-UK has been assisting IESBA on certain sections of the Ethics Code (inducements etc) – where bribery and corruption are at least now within the code. We have had good meetings with James and his working group and with the IESBA Board – who are taking the issue very seriously. However, I suspect that the understanding of what “public interest” means is a long way from confirmed in the minds of professional accounting – as James confirms in his interview.
Thanks Jeff
Appreciated
I agree with your conclusion
Richard
As you say, this is an interesting decision. The more anyone looks at this case the worse it looks.
If the FRC had upheld the fines it would’ve been a tremendous criticism of Deloitte Touche & one person in particular within DT.
By cancelling the fine, however, they are saying “this is the sort of behaviour you can expect from our members”. Which, since the behaviour is immoral to a profound degree to the extent that its skirting criminal, is alarming.
The headline should, probably, be
ACCOUNTANTS SAY – DON’T TOUCH US WITH A 5 FOOT STICK !
Which worries me because while, god knows, we (as a country) don’t need Independent Financial Advisers, Tax Advisers, Wealth advisers, Shopping advisers, Investment analysts etc, we do really need accountants.
Once a business gets much beyond the simplest level of one person & their shop/van etc they’ll need accountancy help.
This kind of thing doesn’t make people want to seek out accountants (except perhaps with a pit-bull).