Accountants accept some blame for fueling financial crisis and encouraging tax avoidance

The Telegraph reports that a majority of accountants accept some blame for fueling the financial crisis and, more importantly, driving tax avoidance.

The majority of accountants accept some blame for fueling the crisis, as well as helping drive tax avoidance among businesses and wealthy individuals, according to a new report published today.

A survey carried out by the Association of Chartered Certified Accountants shows 70pc of auditors say their profession should shoulder responsibility for the meltdown that led to bank bail-outs and Europe’s sovereign debt woes. 

Similarly, just over 80pc said their industry is partly to blame for tax avoidance, the poll of 261 accountants from around the world found. 

Only 22pc of those surveyed said they prioritise the best interests of the public when making decisions.

The accountants contribution to the financial crisis including signing off on audited financial statements saying that the banks are actually solvent going concerns when everyone knows they are insolvent.  By signing off on the audited financial statements and affixing their names to what is effectively a 'lie', accountants undermine trust in themselves and the financial system.

As for encouraging tax avoidance, it is nice that the accounting profession acknowledges that it creates and blesses products for avoiding taxes.  It would be even nicer if the accounting profession were to acknowledge just how damaging to society its tax avoidance products are.  After all, by not paying what they own when they owe it, tax avoiders place a burden on society as their tax receipts have to be made up either through borrowing the money or by cutting programs that society has decided it wants.

However, neither of these practices is likely to change in the near future as the profession makes a sizable amount of money from engaging in these activities.

“2012 has been the year of questioning trust among the professions and institutions once held in high regard,” said Helen Brand, ACCA’s chief executive. “And the accountancy profession has not been immune from this questioning and neither should it be.” 

The poll also highlighted a disparity between the public’s perception of accountants, and those of the accountants themselves. While nearly three-quarters of auditors thought the general public believe accountants are trustworthy, just 55pc of the members of the public surveyed agreed, with doctors, architects and pilots thought to be more reliable.