THE news that the head of the accountancy watchdog, the Financial Reporting Council, is at last set to resign follows decades of spineless deference to the Big Four accountancy firms which are behind some of the most outrageous financial scandals that have led to the collapse of businesses and thrown thousands of workers onto the dole.

The most recent debacle involved the Carillion collapse earlier this year which is set to cost taxpayers at least £148 million. 

Ironically an estimated £50m will be paid to auditor PricewaterhouseCoopers, one of Carillion’s auditors for its work in the process of winding down the business. 

Two other accountancy firms, KPMG and Deloitte, were hammered by MPs over their role in Carillion’s collapse during a parliamentary inquiry. 

Labour MP Rachel Reeves, who chairs the business committee, said Carillion’s annual reports were “worthless as a guide to the true financial health of the company.”

The Big Four accountancy firms have been forced to draw up contingency plans for a break up of their British businesses to solve conflicts of interest embedded in the industry. 

The pressure on the four firms that dominate the sector — KPMG, Deloitte, EY and PwC — to prepare for a forced break-up has increased following high-profile corporate collapses with their fingerprints all over them. 

So many are the accountants’ conflicts of interests and so limited the choice of firms for large pieces of work, however, that when Carillion collapsed in January the same PwC landed the job as government-appointed special manager — re-emerging, in the words of inquiry co-chairman Labour MP Frank Field, “as butcher packaging up joints of the fallen beast to be flogged off.”

The Big Four have relied on their international dominance to act as gamekeeper and poacher so they keep passing dodgy audits for massive fees, and then offering their services to the government to tackle accountancy fiddles, while later on getting back to companies advising them how to get round new government regulations on tax avoidance which they have designed. 

They are also up to their necks in advising on outsourcing public services which frequently fail to provide adequate or safe services. 

The danger is not a new one. The financial crisis began a decade ago and intensified through flawed accounting, as, first, US sub-prime lenders and, then, mainstream British banks such as Royal Bank of Scotland, Lloyds TSB, and HSBC polluted and fiddled their balance sheets without auditors raising any objections. 

A later parliamentary committee concluded that “the complacency of the bank auditors was a significant contributory factor” in causing the 2008 crash. 

New York state regulators concluded that Deloitte helped British-headquartered Standard Chartered Bank cover its tracks by yielding to pressure from bank officials to keep quiet about suspect money transfers. 

US authorities eventually decided that Standard Chartered had hidden thousands of transactions totalling more than $250 billion by banks controlled by the government of Iran, which is under US and international sanctions related to its nuclear programme and support for terrorist groups. 

PwC was also in up to its neck in the recent Tesco accountancy scandal when a £263m black hole in its accounts was discovered in 2014, which later grew to £326m because it had incorrectly booked payments from its suppliers early. The scandal was not revealed until 2017 and led to a programme of store closures and mass sacking of workers. In 2007 KPMG audited HBOS Bank and found everything fine and dandy until six months later the bank collapsed went bankrupt and had to be taken over by Lloyds Bank Group.

The City of London is widely acknowledged to be the money laundering capital of the world with accountancy firms hard at work with the soap and detergent. 

In 2017 the Guardian reported that HSBC, the Royal Bank of Scotland, Barclays and Coutts Bank had waved through up to £65bn of transactions linked to a major scam in Russia. This had first come to light in 2014. Much of the money is believed to be linked to organised crime and corrupt officials, who were seeking to clean their cash so that it could be spent without suspicion.

Governments and gutless watchdogs are in awe of the City and the financial institutions who constantly remind them that they are the engine driving the British economy and return billions in taxes to the Treasury while upholding the highest standards of fiscal rectitude and probity. 

The reality is they are a squalid gang of corrupt spivs gambling with the livelihoods of millions of workers while awarding themselves obscene salaries and bonuses. 

They know they are almost untouchable, operating outside the law in a financial sewer polluting and contaminating politics.