Editor's letter: Trust’s all folks!

27 October 2016 by Carlos Martin Tornero

So this is farewell. This is my last editorial as I move on to pastures new (a great title called Responsible Investor) after almost five eventful years writing for The Accountant, as well as contributing to our sister publication International Accounting Bulletin.

Who would have thought that accountancy was going to be that much fun? No wonder the years have flown by while I’ve been closely monitoring this profession.

In the rear-view mirror I can still see, let’s call them, evergreen topics which we will probably keep debating well into the future. Here listed are just a few:

An IFRS world without “that country in-between Canada and Mexico” as Hans Hoogervorst, IASB chairman, once said (convergence being a consolation prize).

The EU audit reform and the apparently thorny issues (for some) of rotation and caps on non-audit services (will the reform survive?).

The slightly chimerical emergence of non-financial and sustainability reporting, which accountants want to claim as their property (well done so!).

The lack of healthy competition among accountancy firms, where Big Four inbred families hoard the vast majority of market share, (quite ironic for free market economies, which call this phenomenon consolidation, rather than an utter market failure).

The accounting scandals, whose slap-on-the-wrist response from overwhelmed regulators, surely make investors and everyone (i.e. all stakeholders) wonder if either the auditors were turning a blind eye or that their function is to become a utility bill that serves no further purpose.

Of course, the avoidance of tax avoidance, accountants’ favourite topic as chief designers, enablers and marketeers of such avoidance, which contradicts the public service function that profession leaders say accountancy serves.

And the flip side of avoidance: the drop in the tax revenues that pay for public services, and the lack of expertise (and willingness) of governments even to properly account for those shrinking resources, perhaps using IPSAS. But ignorance is bliss and makes politicians unaccountable.

And that’s all fair enough. If accountants cannot promote transparency and serve the pubic interest, because first and foremost they are hired guns of their clients, let’s just not pretend otherwise. However, make no mistake, trust can’t be earned without encouraging frankness and transparency.

And, believe me, I’ve talked to stakeholders from the entire world, and everyone is obsessed with recovering trust.

Well, the soul-searching continues, my friends, trust is not possible if you are not a transparency champion. That’s why we’ve devoted much of the ink of this last issue to Paul Kazarian’s crusade for transparency in the context of Greece’s bailouts.

That’s one of his messages: transparency is the precondition for recovering taxpayers’ trust. Does this strike any chords? Aren’t investors and other stakeholders the taxpayers of accountants’ clients?

I hope our readers found this publication relevant under my editorship. Thanks for all your support. I wish you all the best of luck in the future. And remember: that’s all, trust’s all, folks!

Carlos Martin Tornero, editor, The Accountant