"The sense of responsibility in the financial community for the community is not small. It is nearly nil."
The Great Crash 1929
John Kenneth Galbraith
We tend to see accountants as quiet, retiring and objective professionals, and of course they often are. But almost unnoticed behind them stand four global organisations with immense power: the megaaccountancy firms, Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers, and they are not retiring at all.
Between them they audit all the FTSE 100 companies and employ over half a million people, with revenues - before the Enron affair, when there were five of them - of over $65 billion every year. They are not just auditors, but providers of management services, and purveyors of the latest management fads, from downsizing to reengineering. They are also the cheer-leaders for globalisation.
Enron collapsed in 2002, followed shortly afterwards by their auditors Arthur Andersen, which had been paid $25 million the previous year for services over and above their basic accounting, and which ended the relationship to the sound of the shredding of documents. The Big Four had just lived through an insane period of corporate history - partly their own responsibility - that led to American accountants increasingly employing tick-box methods of checking accounts that allowed so much wrongdoing to slip past public scrutiny. In the days when more than 90% of the value of a company like Microsoft could be made up of intangibles - brand value, know-how, belief in future profits - then the world needed innovative accountancy.
