William Parrett was discussing how to improve the quality of auditing and financial reporting. He said it would take more than auditors alone to protect investors and other users of financial statements, “especially when there is a will to do the wrong thing”. He believed that the time has come to shift the focus away from the auditors to what he calls “the team”.

“While the global auditing networks need to focus on continuous quality improvement,” he said, “worldwide consistency will remain elusive unless regulators and standard-setters are equally committed to achieving a greater degree of uniformity in the professional environments, including the regulatory regimes, in which auditors work.

“It’s no different to a football game. You need all your players on the field to win. In the current environment all the capital market players need to be a team – the regulators, auditors, investors and others.”

Mr Parrett is global CEO of  Deloitte Touche Tohmatsu, one of the four big accountancy firms in the world. Since the series of corporate scandals that began in 2001 with Enron, one of the world’s leading energy companies, accountants feel that they have been treated like footballs rather than respected players, kicked around by those hurt by the scandals who are  now looking for someone to blame.

At a meeting in London in October 2005 of the accounting industry’s Global Public Policy Symposium at which Mr Parrett shared his thoughts, the consensus emerged that it was time to put aside gloom.  Over the past three years there have been many reforms and much financial legislation affecting accounting, a fact that was generously acknowledged by Michel Prada, a senior regulator and chairman of the technical committee of the International Organization of Securities Commissions (IOSCO).

In fact, there are signs of “regulatory fatigue”, said Mr Prada.  Although a lot remains to be done, in the main, he said, “we should now focus on implementation rather than adding new legislation.”

While pressing his metaphor of a sporting team working together to implement reforms globally, Mr Parrett listed some of the improvements taking place in the networks of major accounting firms themselves:

• improved standards of quality control;
• stronger internal inspection programmes;
• more independence tracking systems; and
• improved training programmes.

Mr Parrett said that Deloitte member firms spend about 30,000 hours a year developing audit-related education materials. In 2005 Deloitte’s auditors are spending more than two million hours in training.

Mr Parrett’s remark, “when there is a will to do the wrong thing”,  was taken up by a number of  speakers at the meeting. Samuel DiPiazza, global CEO, PricewaterhouseCoopers, said that collusive fraud at the highest level is extremely difficult to find.  However, he told a reporter that he was confident that fraud would be uncovered eventually. Mr Parrett’s view on the subject was summed at a meeting on corporate governance held in London earlier in 2005. “There’s no question,” he said, “that when leaders and others do the wrong thing they should be punished. But let’s not forget that, in the main, executives do act honestly and ethically.”

While the accounting industry is doing its best to improve, an overriding worry at the meeting was that at least one matter was beyond its control: there are so few big accountancy firms. “There is a particular fear that the next corporate scandal would reduce the Big Four to the Big Three,” said Charles McCreevy, European commissioner for the internal market and services. Who would replace the failed firm, ensuring continued diversity? Who would want to take the risk? “Events have shown that auditors do not have such deep pockets as some like to think they do,” said Mr McCreevy.

However, Mr Prada was able to send delegates home with a reassuring thought. “No one,” he said, “has yet found a better system than that of an external audit performed by skilled professional appointed and paid, directly or indirectly, by shareholders.”