On the money with Gavin Hinks
A few months ago I wrote in this column about the toll the credit crunch was taking on accountants – or mainly finance directors at the time
They were carrying the can for the damaging effects of the crunch and having
to resign in droves.
We have a new phase on our hands at the moments – accountants facing criminal
charges for their actions.
OK, it’s not here in the UK, but events in the US will act as a warning for
many. Allen Stanford gave himself up to the FBI but two of his accountants are
already facing charges for their part. The chief financial officer, James Davis,
is already facing fraud charges, though he is cooperating with the authorities.
In the Madoff
Ponzi scheme, the auditor is up on charges.
It doesn’t say very much for accountants except that, if you want to pull off
a big fraud, you need them to manage, even help design the scheme.
It’s in stark contrast to the other trend of the recession – that being the
emergence of the essential nature of finance directors and accountants to keep a
lid on the things. That’s the legitimate activity of the company, I mean.
Managing cash flow, holding spending down maintaining up to the minute
information so that everyone on the board knows exactly where the company is. He
or she is a guardian, an essential part of the effort to survive the recession.
But then a few bad eggs come along and spoil it for everyone. The fact is,
though, the bad eggs are the reason the authorities believe accountants are so
important in spotting and reporting financial crime. That’s why the pressure
will always be on them.
The Serious Fraud Office, for instance, is having a close look at hedge
funds. Who’d be surprised if they wanted to speak to the accountants concerned.
Gavin Hinks is editor of Accountancy Age
