The FT has a letter from me in it today. This was written in response to an article in which PWC complained that it was unable to recruit the staff it wanted. As I write:
I note that PwC is worried about its ability to recruit and retain the young auditors on whom its business model depends (“Focus on audit failures deters recruits, warns PwC UK boss”, Report, December 29).
It blames this on the government and regulators for making critical comments about audit, but the problem is of its own making.
I cannot reproduce my own letter under FT copyright rules. So let me summarise the argument, which was in five parts. I argued that young auditors would not want to:
- Work for organisations that see themselves as pure agents of capital when it was clear that accounting should be for the benefit of everyone;
- Want to work in a box-ticking organisation, when that is what the audit profession has reduced audit to being;
- Want to work for organisations that get 30% of their audits wrong according to the Financial Reporting Council, despite this box-ticking approach;
- Work for auditors when they continue to push climate change issues to the sidelines, as the International Sustainability Standards Board is planning to do.
I concluded, fifthly:
Auditors' problems are of their own making. If they both cleaned up their acts and redefined accounting as a profession that held corporations to account for both the good and harm they do in society then they could make accounting and audit an engine for change. Their recruitment problem would be solved overnight. Instead they are seen by some as the “whitewashers” of the status quo. No wonder no one wants to work for them.
Young people are sending a message to the audit profession. It should listen, take note and change rather than moan.
Richard Murphy
Professor of Accounting Practice, Sheffield University Management School Director, Corporate Accountability Network, Ely, Cambridgeshire, UK
I hope they take note.
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Well said- I hope they do take note.
“Young people are sending a message to the audit profession. It should listen, take note and change rather than moan.”
Killer last sentence! Could apply is sooooo many areas.
I’ve no wish to sound cynical or undermine the main thrust of your argument which I have to say is well reasoned but could another effect be that young people detect that all they are doing is supporting a very twisted pay scale in an industry that awards so called ‘partners’ huge salaries and bonuses and in all probability pays its lower grade staff peanuts?
Pay scales between the ‘shop floor’ and management cadres are well out of whack these days – even the public sector has fallen victim to that, with lower paid workers the ones actually doing all the work.
A well-confirmed source at my place of work recently told the story of my CEO bringing in a consultant to help get the SMT to work together better. The consultant told my CEO that she could get more done by losing half the SMT team! Result? The consultant was let go – probably because the CEO is the person who has made most of the SMT appointments in the first place.
There is no doubt that we are top heavy where we are – the crises of low wages has also hit our DLO (direct labour organisation) and we’ve been haemorrhaging people left right and centre to the private sector where wages have been growing. We now have had to up our wages to the point where middle management (the likes of me) need a wage rise too as in terms of succession planning as that is where the next SMT might come from but also middle management is leaving for better paid work (all this relates BTW to the property sector. There will be no wage rise for SMT apparently but they are all on £57K upwards.
Maybe just … the City and ‘professions’ are losing their attraction. Perhaps younger people are less motivated by apparently easy money in organisations they see as part of the ‘problem’.
I always said to my two that I did not mind what they did as long as they were not bankers, lawyers or accountants (sorry Richard). I’ve seen too many pushed in that direction and end up not really that happy, even if they are paid a lot. As Dylan said, ‘all the money you have will never buy back your soul’
I’ll admit that their 20’s were an ‘adventurous’ time but they learnt a lot and have always been independent. And they are both doing things they want to do, both in the creative area.
I face that issue with two young men now
The other issue for recruitment is that the media is constantly saying that accountancy and audit in particular will be overtaken by AI. Why would any young person want to commit to an industry where their job will be wiped out in a few years?
I have been an avid reader of the FT for years and have become increasingly depressed by the reported decreasing standards and avoidance of accountability of auditors in cases that show blatant failures/disregard for even the most basic processes.
I was particularly incensed by the PWC article painting themselves as ‘victims’. I whole heartedly agree with your repost this morning and thank you for taking the time to write it.
Thank you
I’m pleased that Richard has made these points in his FT letter in his role as Director of the Corporate Accountability Network. I also the various responses in this blog.
Whilst having no direct experience of the function of financial audit by the likes of PwC, I used to try to understand the annual reports of the three multinational corps I’ve worked for.
In later life I became a consultant internal auditor of companies who were externally audited against an international ISO 9000 quality management standard.
What I found was that senior and middle management were aware of all the areas where they were likely to be non-compliant and went to great lengths to ensure that their ’whitewash’ was in place for the annual audit.
This must also be true for financial audits. To what extent the eternal auditors are also complicit in ‘whitewashing’, may be better known by those of you closer to the action, especially considering that PwC et al also have consulting arms.
what intrigues me is how these potential recruits know its awell-paid shit job
so greeds not absolutely good. then
Truss is certainly looking ridiculous in thinking that Britain has any influence whatsoever in preventing further Russian incursion in the Donbas region of Ukraine. Pretty harsh sanctions already exist that Putin is completely ignoring, and now he is committed to sending troops to quell any more revolts in Kazakstan and other central Asian states that may follow suit. He won’t want to receive another bloody nose such as the Russians received when they invaded and unsuccessfully occupied Afghanistan.