While some accountants get a hot bath, the FRC needs a cold shower

December 19th, 2018

Stephen Haddrill knew that after Christmas, like Santa, he would (probably) be given the sack. So he announced in November that he was stepping down from his job as chief executive of the Financial Reporting Council (here). The FRC is the regulator for accountants – and in its own accounts it notes that Mr Haddrill was paid £423,691 in the last year. 

If he had not jumped he would almost certainly have been pushed following the release of the Kingman review into the workings, or otherwise, of the FRC (here). After a year in which auditors have scored spectacular own goals at BHS, Carillion and elsewhere, the FRC is not only getting a new leader but also a boot up the backside.

It needs one. What is the point of a regulator if it is not keeping those it regulates up to the mark? In his statement, Mr Haddrill pointed to his organisation’s “important programmes” on corporate reporting, investor stewardship and – wait for it – audit reform. Other people had a different view of the FRC:

“Useless” – according to the House of Commons

“Needs to be put in special measures” – reckons the Local Authority Pension Fund Forum

“Needs to be turned into a proper regulator” – says Baroness Bowles

You get the picture. Much of the criticism has been about the FRC not being tough enough on the Big Four accounting firms as well as it having problems with its own governance (this from a body that makes the rules on board governance).

As he moves forward into the New Year, Mr Haddrill will no doubt ponder these issues – and the loss of his eye watering salary – in his bosom. Meanwhile, outside of those well-publicised shocking professional accountancy misjudgements, some other accountants have been getting into hot water.

Literally.

I refer to the list of bizarre excuses given by company directors for the late filing of their annual accounts (here). This catalogue of ridiculous reasons for late filing is issued every year by Companies House and is always entertaining. But this year it hit a new comedy high with this memorable excuse from an unnamed company director:

“Regarding my annual accounts – I’ve just caught my accountant in the bath with my wife, so won’t be able to file them on time.”

I have to say that the people I come into contact with in regional and local accountancy firms are, for the most part, polite, professional and hardworking. And I would think company directors everywhere should have no qualms in introducing their accountant to their wife or, indeed, to their bath.

But not at the same time. Obviously. 

Merry Christmas!!