A nation of accountants

June 13th, 2009

The growing industry has aided corruption, fraud and unethical governance. Why does the state help it audit society at a profit?

Prem Sikka
The Guardian

The UK has about 50,000 family doctors, but nearly 280,000 professionally qualified accountants (pdf), often earning exorbitant salaries. That is almost the highest number per capita in the world and more than the rest of the European Union put together. Unsurprisingly, nearly 165,000 students are registered with the UK accountancy trade associations to become professional accountants. In addition, probably more than 100,000 are studying for accounting and business degrees at UK universities and colleges, dwarfing the numbers studying engineering, mathematics and sciences. A record number of graduates are making a career in accounting.

This huge social investment in accountants and accounting technologies has not resulted in the publication of sensible company accounts, or worthwhile company audits (pdf), as evidenced by the banking crisis and other scandals. Many accountants do a valuable job, but excessive reliance on accounting has not given us freedom from fraud or produced ethical and responsible corporate conduct. If anything, accounting firms have undermined national tax revenues and used their expertise to excel at money laundering, bribery, corruption and other antisocial practices (pdf).

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