The sector remains one of the UK economies real drivers and financial experts from all over the world flock to the UK to work, such is the level of skill in the sector.
However, like banking a decade ago, often stories emerge which besmirch the industry’s integrity.
Carillion’s collapse last year left a hole in the UK economy and huge question marks were raised over the processes which saw its accounts given proper scrutiny.
Other high-profile cases such as the near failure of Patisserie Valerie this year, have led to greater pressure on the large scale operators.
In Yorkshire we are blessed with a high-performing professional sector, with accountancy at the heart of this.
Its bosses are active players in the local economy, helping campaign for the improvements we need and helping to contribute to the greater betterment of the industry.
They are at the bedrock of the region’s commerce and entrepreneurs remain deeply dependant on their expertise and advice.
It will have been unsettling among their offices this week to see that Britain’s accounting watchdog has once again heavily criticised major firms over substandard audits, with a quarter judged to be below the acceptable standard.
In its latest annual inspection the Financial Reporting Council (FRC) said there had been no improvement on last year and criticised all seven of the UK’s biggest auditors for failing to challenge company bosses.
Three quarters of FTSE 350 audits were judged to be good or requiring limited improvements, below the FRC target of 90 per cent.
Grant Thornton was singled out for tougher scrutiny after the firm’s rate of acceptable audits dropped to 50 per cent, compared to 75 per cent last year.
PwC also exhibited a deterioration in its FTSE 350 accounts, from 84 per cent to 65 per cent.
The firm has pledged to invest in people, training and technology to get its auditing quality back up to standard.
KPMG, which was heavily criticised in last year’s report, was found to have acceptable audits in 80 per cent of FTSE 350 accounts versus just 50 per cent last year, although the firm, which audited the accounts of Carillion, remains under enhanced scrutiny and the incident still hangs like an albatross around its image.
Stephen Haddrill, chief executive of the FRC, was frank and pulled no pictures in his summing up for the sector.
He said: “At a time when the future of the audit sector is under the microscope, the latest audit quality results are not acceptable. Audit firms must identify the causes of their audit shortcomings and take rapid and appropriate action to improve quality.”
The auditing process is vital to ethical and effective business. In a age of advancing technology it is inevitable this will get more and more efficient.
Ethics will always be in question for powerful and influential business.
The news will no doubt lead to calls for a breaking up of the major players, just as was seen during the banking crisis.
Like so much rhetoric today it is a simple solution to complex problem and bound to failure in my judgement.
While a lot needs to change we should not allow stereotypes of heartless accountants to perpetuate. There are few entrepreneurs of note who achieved their success without a clever accountant and a lot of good advice.
A focus on these key mantras can be its salvation.