Accounting and Auditing Practices (Hansard, 23 January 1991)

§ 14. Mr. Cousins
To ask the Secretary of State for Trade and Industry if he will review accounting and auditing practices in the United Kingdom.

§ Mr. Redwood
The Companies Act 1989 made important changes in the law on company accounts, including improvements to the enforcement of accounting standards. It also provided a new regulatory framework for company auditors. The new Financial Reporting Council, Accounting Standards Board and Financial Reporting Review Panel have been established. Arrangements are in hand to strengthen and widen representation on the Auditing Practices Board. I shall be taking a close interest in how those changes work in practice.

§ Mr. Cousins
Is the Minister aware that his amazing smugness and complacency about the likely effect of the Companies Act 1989 flies in the face of experience? Is not the wide talk of profits for companies now largely fiction and a matter of opinion, with figures being massaged by standard accountancy techniques? Is the Minister further aware that such a state of affairs is not in the interests of the accountancy profession, the companies concerned or the reputation of Britain as an industrial centre?

§ Mr. Redwood
The hon. Gentleman and his hon. Friend the Member for Great Grimsby (Mr. Mitchell) have tabled 436 questions on accountancy in the past two years, but they seem to have learnt nothing about the enormous strides that the profession is taking in improving the regulatory framework. They have not understood the important provisions in the Companies Act 1989 which began the debate. Rarely have so many questions been asked by so few hon. Members to try to do damage to one profession. I wish that the Opposition would lay off the profession, because their intention is malevolent. If they did that, they would recognise that the profession has extremely high standards and that, wherever those standards might lapse, disciplinary and regulatory action is being taken.

§ Mr. David Shaw
Is my hon. Friend aware that United Kingdom accounting and auditing practices are the envy of much of the world, especially in eastern Europe where many British accounting firms now have offices doing a considerable amount of work? Is my hon. Friend also aware that the Companies Act 1989, which his Department brought into being, has set up a substantial 320 regulatory framework to ensure that our accounting profession stays at the top compared with the rest of the world? Can my hon. Friend give any reason to explain why the Opposition continue to knock the United Kingdom accountancy profession?

§ Mr. Redwood
My hon. Friend is quite right. The hon. Member did not need to table 436 very expensive and time-consuming questions in order to grasp the main point —that British accountants are doing extremely well in many world markets. My hon. Friend is also right to draw attention to eastern Europe where British accountants' skills are highly prized and where they have been spearheading export efforts in the service industries. I wish I could explain the reason for this persistent campaign by Opposition Members, but they will have to speak for themselves.