UK: Balance sheets and the power of the mass

This is a council that checks some 300 sets of reports annually, at most. So this announcement clearly belongs to that extraordinary British tradition of adding layers of seemingly petty regulation. Indeed, it is. But it also brings once more to the surface the stuff — social and economic values — the democratic world’s dreams are made of.

Simply put, this is a proposal behind which it resides the belief that people in this island still can feel offended enough, even outraged enough to vote with their feet as consumers, clients, or retail investors. Also, as voters who urge their members of the Parliament to take action. Who needs an arrogant, patronising and probably excessively heavy state to impose fines that corporations may somehow offset anyway, when government auditors have the people on their side? Brussels, listen up, please.

If the measure gets approved, the council will reveal in its own yearend memory documents which companies have received reprimands and which ones at the time are under investigation.

But the controversy now opened has turned against the very auditors in an unexpected boomerang-like shift.

“What should we do with producers who routinely deliver faulty goods and services?,” asked accounting professor Prem Sikka from the Essex Business School.

“Producers of cars, food, medicines, aeroplanes and even financial products are forced to compensate injured parties, recall their goods and face the possibility of being forced out of business. But such niceties do not apply to the auditing industry. The silence of the auditors at distressed banks is well documented though this has resulted in little effective action. No auditing firm has returned the fees for dud audits.”

Let us reassure the two parties that the two arguments easily complement each other.

In other news

Lately, Kantar, the market research firm, has busied itself mapping the supermarket chain industry in the UK. The results it has come up with are worth mentioning because growth gained two-digit speed particularly in the so-called discount retailers. For instance, Lidl saw sales go up by 17% and 35% at Aldi, while Tesco’s declined a modest 3%.

How do these figures bode with Downing Street claims that the British economy is surfing the crisis’ waves? Badly, if you are an ordinary citizen.

About the Author

Victor Jimenez
London contributor at thecorner.eu, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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