The UK boss for PwC said criticizing financial accountants from politicians and regulators is undermining the process and putting it at risk to make it harder to attract new people.
Keeping the right readers “can be very difficult if there is an external problem”, Kevin Ellis, the UK chairman and senior partner at PwC, told the Financial Times.
PwC says its average readership numbers were recently 8 percent higher than in other areas of its business this year, an increase from 6 percent in 2020.
With only 15 percent of eligible readers enrolled in the next three months coming from the UK while the rest from overseas, it added, meaning it was difficult to attract potential candidates.
Auditors have been criticized for failing to raise the alarm before companies fall into companies such as BHS, outsourcer. Carillion and cafe chain Patisserie Valerie. Four Major Accountants – Deloitte, EY, KPMG and PwC – have been fined £ 42m over the past three years for failing to investigate.
Labor MP Rachel Reeves, former chair of the House of Commons business select committee, said in 2019 that accountants were “involved” in corporate failures and told corporate executives “we can’t trust you to do the right thing”.
Sir Jon Thompson, chief of the Financial Reporting Council, said last month that the Big Four sometimes “did not do their business well”, which led to Ellis challenge the director of disagreement between his public statements and secret answers at PwC.
Ellis states: “Audit still has a ‘halo’ for new recruits because it seems like a reliable business education. . . However, its appeal. . . it deteriorates if the external issue from the political and administrative authorities looks at the negative rather than its economic importance, supporting trade decisions and confidence in the larger market.
“At a time when investors want to monitor businesses on time with another ESG [environment, social and governance] issue, the audit function cannot afford to lose power. We need more Auditors, not fewer. ”
He also said that in criticizing investigators, it was important to differentiate between “cases in which accountants were found to be in error” and “misconduct” by accounting firms.
This will be important in the coming years because the economic downturn is putting many businesses at risk.
“Sometimes you feel like there is a wall of insolvencies coming up,” he said. “If the answer is ‘where were the auditors?’, It does not make it easy to tell a 23-year-old that audit is where you should spend 25 years of your career.”
PwC is is being investigated and supervisors on its research into the minibond companies London Capital and Finance, which collapsed, and Wyelands Bank, owned by entrepreneur Sanjeev Gupta.
Accountants have been struggling to recruit accountants when they want to increase their ranks to further the research and to benefit from what companies want to confirm the disclosures and not the financial situation as the weather progresses.
The FRC has been growing, recruiting more people from the same group of qualified accountants as the accounting firms manage.
Ellis acknowledged the FRC’s goal of becoming a “regulator”, helping companies improve their statistics instead of focusing on their mistakes.