There was a time when accountancy was a by-word for stability and, well, boringness. It's what the meticulous dullards did in college before disappearing into an anonymous suburb. Who could you trust if you couldn't trust an accountant?
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Virtually anyone, it now turns out.
Australia had its own scandal, of course, when it turned out that PwC was advising the government on closing tax loopholes while another bit of it was advising big companies on where the loopholes were.
As the Financial Times described it, "a tax partner used secrets gleaned from his advisory work for the government to help craft tax planning services for multinational technology companies".
It was a bit like the local police officer telling householders how not to be burgled and telling the burglars where the alarms were.
And now another firm in the global Big Four, Ernst & Young (EY), has fallen short. "German watchdog finds EY's Wirecard audits grossly negligent," the FT reported.
Ernst & Young has form. In 2022, the US Securities and Exchange Commission fined it US$100 million because its trainees had cheated on - wait for it - an ethics exam.
"It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things," the director of the SEC's enforcement division, Gurbir S. Grewal, said.
And earlier this month, the third of the world's Big Four accountancy firms did its bit.
"Hundreds of staff in KPMG's Netherlands business, including senior partners and managers, cheated on professional exams, and the firm misled investigators about the misconduct, according to the US audit regulator," the FT reported.
Which leaves only Deloitte of the Big Four: "Deloitte has been ordered to pay a record fine of £15m plus legal costs of £5.6m for committing serious misconduct when it audited Autonomy, a former FTSE 100 technology group at the centre of one of the UK's biggest accounting scandals," the FT reported in 2020.
There is clearly something wrong. Scandals bring a familiar response. Shake-ups, apologies, fines, promises to change the culture - and then another scandal comes along.
Part of the problem is the hold of the dominant idea of the past three decades that capitalism didn't need to be reined in. Capitalists knew best. Regulation from outside risked killing the goose which laid the golden egg.
So, best leave companies to police companies. The accountancy firms are hired by the firms whose books they audit. There is an obvious conflict of interest.
But more worrying is that there seems to be a problem with the very culture. It's not just the structure of the industry.
"The FT identified a disturbingly common pattern in terms of how complainants were treated: most initially felt ignored, then isolated and were eventually pushed out. Legal clauses aimed at silencing them swiftly followed; nine of those interviewed said they were pressured into signing restrictive non-disclosure agreements. Others were asked to sign but resisted."
Invariably, the perpetrator survived in his job and the victim (of either sex) left.
The Big Four are not small businesses. At the last count, they employed 1,514,860 people around the world. PwC Australia employs about 7000 people.
They can't all cheat on their ethics exams, can they?
HAVE YOUR SAY: Do you know any accountants? Do they meet the stereotypes? Do you have any thoughts about the Big Four firms? Do they need more or less red tape/oversight? Email your response to echidna@theechidna.com.au.
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THEY SAID IT: "Annual income twenty pounds, annual expenditure nineteen, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, nought and six, result misery" - Mr Micawber in David Copperfield.
YOU SAID IT: I opined about Justice Lee's way with words, and that he seems a man of the people.
Fiona offered quite a few thoughts on the matter, including this. "The judgement is a gem. But, beyond this, Justice Lee's determination to publish everything, and see evidence play out in court has been a lesson in transparency in the Australia's judicial system. We now know how to prepare ourselves to be better witnesses, ie stick to facts not feelings, and avoid giving context instead of clear answers, if we want our evidence taken seriously. It will make us better jury members. Justice Lee has ensured that there is a mountain of material for student lawyers or potential participants in court proceedings to better understand how a court case is constructed."
Warren, who also "loved listening to Justice Lee", makes a point about one of the phrases. "Very eloquent, precise and clear. You quoted him twice on the phrase 'all mouth and trousers'. What he said and with such meaning was 'all mouth and NO trousers', a very important extra word in the definition of certain speakers."
Arthur makes the point that "clever judges" (and he notes that not all are wise) are "trained to detect lies and distortions of truth. Juries are not so trained and can easily be swayed by clever barristers".
Jennifer was also a fan. "It is amazing to have the privilege of observing a judge who is not only highly intelligent and extremely analytical but also clear in describing his rationale for managing a very confusing and complex case full of contradictions. It is a delight to observe judges who are wise, with much up to date knowledge of all types of human nature, psychology, trauma and the world in general as it shifts at all levels of society."
Steve Evans
Steve Evans is a reporter on The Canberra Times. He's been a BBC correspondent in New York, London, Berlin and Seoul and the sole reporter/photographer/paper deliverer on The Glen Innes Examiner in country New South Wales. "All the jobs have been fascinating - and so it continues."
Steve Evans is a reporter on The Canberra Times. He's been a BBC correspondent in New York, London, Berlin and Seoul and the sole reporter/photographer/paper deliverer on The Glen Innes Examiner in country New South Wales. "All the jobs have been fascinating - and so it continues."
