Richard Brooks argues in "Bean Counters" that accountants have lost track of what they’re supposed to be doingby Oliver Bullough / June 19, 2018 / Leave a comment
Published in July 2018 issue of Prospect Magazine
There is an irony at the heart of Private Eye journalist Richard Brooks’s improbably rollicking history of the accountancy profession. At its heart this is a plea for accountants to become boring again, and yet if accountancy was as boring as Brooks wants it to be, he could never have written such a good book about it.
Brooks traces accountancy from its birth during the Renaissance, through its Scottish adolescence, but the book really takes wing when it reaches the 1980s. As money dashed faster and faster around the world, the people tasked with keeping track of it became more powerful. That power brought wealth, and that wealth brought conflicts of interest. Those conflicts of interest knackered the world economy, and we’re all living with the consequences.
Modern accountancy appeared in response to fraud. We needed disinterested professionals to check the numbers on company reports, to stop directors exploiting their power to enrich themselves. But, as the recent collapse of Carillion made clear (in case Enron, WorldCom, and the 2008 crisis hadn’t already) something has gone horribly wrong.
In Brooks’s telling, accountants have lost track of what they’re supposed to be doing, and governments have indulged them. When accountancy firms ceased to be pure partnerships, and gained limited liability, their partners stopped fearing the consequences of their mistakes. When the big firms consolidated—the Big Eight became Six, then Five, and now Four—they became too big to jail. Only these global behemoths are big enough to understand the balance sheets of today’s corporate giants, so we can’t afford to lose any more of them. That means they can’t be punished for their culpable mistakes.