It’s with interest that I note today that the ABC has picked up on a point first touched on in this Blog back in July of this year. Today, fired up by commentary from one of the larger Forensic Accounting firms, the ABC has focused on the Big 4 Accounting firms’ involvement with the banks and the nature, appropriateness, and independence of their relationships.
Personally I consider it unfair to specifically pick out just those four because there are others, but what is true is that the number is very limited. It is also not just accounting, but also other professional fields. Regardless of the totality the preferred advisor group is, in the big scheme of things, very small.
What is also interesting though is the fact that many of this same group boast the provision of significant guidance and professional services to government, and in particular the regulatory bodies being highlighted in the Hayne Royal Commission.
Beyond this at least some of the regulatory bodies have had employees of these firms on board as ‘seconded staff’, which interestingly would have also been the case within the banking fraternity. I certainly can’t quote an example of someone who was seconded to both a bank and a government department, but the potential existence of same leaves the mind boggling!
Going even further, former employees of these advisers are welcomed into the Public Service and may remain therein, but are also just as likely to later return to the halls of public practice.
I know in my role I have had to deal with situations where the advisors to the banks got things seriously wrong. The thing that always puzzled me was, that notwithstanding the seriousness of the error, the same advisors were still on the relevant panel twelve (and more) months later. If I hiccupped in the wrong place I was made very aware of the fragility of my position; it’s just the way it went. As an example of the sentiment, a reportedly true story involved one of the other members of my profession who when confronted by the stance of a bank on the occasion in question, turned around and dropped his trousers, bent over and uttered words to the effect of “if you’re going to do it, you might as well do it properly”. There was no response.
The void highlighted by the interim report is the absence of information of who guided, advised and designed the activities of the key players. No doubt though, that will make the future volumes even more interesting to read.