As the FT reports this morning:
The government is preparing to omit a much delayed overhaul of the UK's audit and corporate governance regimes from its programme of flagship legislative reforms for the coming year.
They have added:
The expected absence of legislation to underpin the overhaul in November's King's Speech, which will set out the government's reform priorities for 2023-24, would mean that the changes are unlikely to be implemented before the next general election.
The situation is actually worse than that. Reliable sources have told me that this would not be a Labour priority either - not being on their agenda until 2027 at the earliest.
So, audit failure that imposes enormous costs on society and undermines the credibility of the data on which our whole supposedly market-orientated society works is not an apparent issue of concern to anyone in politics, even though the evidence suggests that there is a great deal wrong in the accounting and auditing professions.
Why could there be this indifference, I wonder? Could it be that both Tories and Labour (especially) have leant heavily on support from the Big 4 firms of accountants who just happen to undertake most of these failed audits? Or am I being just a touch too cynical?
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Hmmm.
This is to me an obvious signalling to the market.
Either everyone involved knows that things are really bad and they need more time to get ready or basically the message is ‘We don’t care, just keep making money anyway you want to, but just keep the political donations coming in – see you later’.
This has something to do with election expenses I bet you.
When reflecting on this era, my summing up would:
2010 – the last vestiges of a centre Left government in this country was disposed of by capital via a contrived financial crash and a capital friendly Tory government came in.
Since then, this Tory government has – whilst using austerity policies on society – enabled capital to gain not only more wealth but also feed that wealth into politics like never before and add politics to their investment portfolios like never before – what was more discrete is not much bolder.
This has enabled the Tories to retain power and also undermine any opposition to it very effectively and has created a division bell outside of parliament (not in it) where capital’s political friendlies are sorted out from real representatives of the people where the latter are siphoned off into no man’s land and obscurity and vilification.
The people of this country are not all thick Daily Mail, Sun, The Times and Telegraph readers. But capital has been allowed to seize power and play with the electorate.
How else could it be, when successive Tory governments have been eviscerating the country and making it worse? Things fall apart when you do what the Tories are still doing. The only way to keep going when you are destroying something in plain sight to spend money on distracting people with other stuff.
We are living in a corrupt ‘fuck’ of a country that is for sure.
Those corrupting politics could not give a damn about anything but their own agenda – that is how money and wealth is made. There is no room for compromise with these people. The must feel like gods and times are good for them.
Richard wrote: “The government is preparing to omit a much delayed overhaul of the UK’s audit and corporate governance regimes from its programme of flagship legislative reforms for the coming year.”
OK, hands up anyone who was surprised at the gov’s stance. As one who was trained in the 1960s about the critical importance of probity, proof, professional standards etc in auditing, I’m disgusted by the huge lapses in these standards by the Big 4 who now have a significant global monopoly in large audits and whose avaricious pursuit of money is behind these lapses. In this, they are ably abetted by successive Tory and quasi-Tory-Labour governments all the way back to the “Big Bang” of 1986 in the Thatcher era. Why? Money and personal greed of course and the ICAEW’s handling of the huge fines imposed on the Big 4 for their “indiscretions” does nothing for its reputation either.
For PSR: Where you wrote “what was more discrete is not much bolder”, did you mean “what was more discreet is now much bolder”?
I agree with your sentiments on audit
And badly run construction projects also seem to get by.
My granddaughter -about to start year 8-is not able to start back to school as the new building has been found to be unsafe. The company which built the school in 2020 ( and several others, also found to be unsafe) has gone out of business.
I saw her in the supermarket this morning and offered to teach her some history and geography. To her credit she didn’t stop smiling!
Time with grandad might sound more fun….
I hope you both enjoy it
I suspect that the vast majority of people think, if indeed they think about it at all, that auditing is some annoying technical procedure that nevertheless has to be done, rather like proof reading an article. In reality it is more akin to peer reviewing an article than proof reading it.
I also suspect that most people who do realise there is more to an audit than this do not appreciate how much the regime under which audits are conducted matters for the well being of the economy. Actually a similar thing is true for peer review: There are plenty of science journalists who will say “X appeared in peer reviewed journal Y” without first enquiring into the peer review policy of the journal — and, no, they are not all the same.
Overhauling the UK’s audit and corporate governance regimes may be of vital importance, but it is unlikely that any of the three main parties will see it as a priority until a substantial proportion of the voting public do, especially if they stand to benefit from looking the other way. This does not mean it is a waste of time campaigning for it. On the contrary, it makes it even more important that someone does just that, but it will be a hard slog!
It is not the sort of thing I feel qualified to argue for myself, but I will share your blog article.
Thanks