Hey Accounting Kids: All The Money Is In Consultancy!
Conflicts of interest? The Big 87654?! Surely you jest!
The Guardian says - gasp - it could be true:
The Big Four accountancy firms came under fire from investor groups todayfor selling consulting services that could lead to Enron-style conflicts of interest after PricewaterhouseCoopers said a quarter of its £2bn income came from consultancy work.
The issue has dogged the audit industry since the Enron affair exposed poor practices and conflicts of interest and led to the demise of Arthur Andersen, then one of the biggest accountancy firms in the world. However, PwC confirmed that £515m of its £2bn net income came from consultancy. Its closest rival, Deloitte, revealed last week that its consulting practice generated £459m of the firm's £1.9bn revenues.
PWC said it planned to employ an extra 800 staff over the next year, many of them in its consultancy division. The chairman, Ian Powell, said the firm's environmental and sustainability practice was growing strongly and needed new staff.
Can someone tell me what the fuck "environmental and sustainability practice" means in the first place? Please?
Wait for it, here comes the zinger:
However, the corporate governance group Pirc said it was concerned that consultancy services sold to audit clients was a persistent problem that regulators had failed to resolve. It argued auditors could balk at criticising a client if a negative opinion would mean the firm losing millions of pounds of consultancy work. It said the potential conflict of interest could result in accounting errors and fraud going undetected or covered up.
The Financial Reporting Council, which oversees the audit industry, embarked on a review of potential conflicts of interest this year. Stephen Haddrill, chief executive of the FRC, told an audience of accountants: "Just when audit is needed more, the impression is growing that it is delivering less."
Again... WHAT IS THIS YOU SAY ABOUT AUDITS NOT DELIVERING THE ASSURANCE WE WANT?! I am shocked - absolutely and completely shocked.