You can read 19 more articles this month
JOHN McDONNELL urged a crackdown on poor practices in the accounting and auditing industry at the weekend, pledging that “there will be no more Carillion scandals on Labour’s watch.”
At Labour’s State of the Economy conference on Saturday, Mr McDonnell announced that the party had commissioned an independent review of Britain’s corporate auditing and accounting regime.
The shadow chancellor said Carillion’s demise had “once again highlighted the catastrophic failure and inadequacy of our regulatory system,” adding that “the accounting and the pensions regulators have once more failed to do their jobs.”
He said the review, which will be led by Professor Prem Sikka from the University of Sheffield, would consider whether regulatory bodies should be merged, abolished or restructured and what penalties or fines should be imposed in future.
Mr McDonnell said: “Yet again, accountants and auditors seem to operate with impunity while lining their pockets.
“The lack of openness, transparency and accountability means nobody ever seems to be punished for their transgressions.
“We have seen it all before. We still await proper investigation of the accounting and auditing shortcomings which led to the banking crash 10 years ago.
“Our regulatory system is simply not fit for purpose.”
He pointed out that there were 29 regulatory bodies responsible for the financial sector, including the Faculty Office of the Archbishop of Canterbury, while some professions were self-regulated, amounting to a “regulatory maze.”
Mr McDonnell said the system had created “enormous opportunities for waste, duplication, obfuscation and buck-passing” and, ultimately, failed to protect consumers or promote confidence.
He added: “We need a complete overhaul of the entire regulatory framework for finance and business, to promote openness, transparency, accountability and, where necessary, to impose appropriate punishments.
“There will be no more Carillion scandals on Labour’s watch. That is why it is essential that we have a crackdown on poor practices in the accounting and auditing industry.
“Under the next Labour government, the ‘big four’ firms will not be allowed to continue to act like a cartel that prevents new market entrants or drive down standards.”
Mr McDonnell told the conference that he planned to bring reform proposals forward at the Labour conference in September.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by joining the 501 club.
Just £5 a month gives you the opportunity to win one of 17 prizes, from £25 to the £501 jackpot.
By becoming a 501 Club member you are helping the Morning Star cover its printing, distribution and staff costs — help keep our paper thriving by joining!
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by become a member of the People’s Printing Press Society.
The Morning Star is a readers’ co-operative, which means you can become an owner of the paper too by buying shares in the society.
Shares are £1 each — though unlike capitalist firms, each shareholder has an equal say. Money from shares contributes directly to keep our paper thriving.
Some union branches have taken out shares of over £500 and individuals over £100.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by donating to the Fighting Fund.
The Morning Star is unique, as a lone socialist voice in a sea of corporate media. We offer a platform for those who would otherwise never be listened to, coverage of stories that would otherwise be buried.
The rich don’t like us, and they don’t advertise with us, so we rely on you, our readers and friends. With a regular donation to our monthly Fighting Fund, we can continue to thumb our noses at the fat cats and tell truth to power.
Donate today and make a regular contribution.