About the Authors & Contributors
Professor Krish Bhaskar is the principal author of this book. He has published more than 50 books and many refereed articles. He has also worked in the IT, consulting, investment banking, automotive and forecasting sectors. He has experience of running companies, preparing reports and auditing .
Krish has been aided and abetted by Professor John Flower whose major role is as an auditor and researcher into multinational financial reporting. John would classify himself as left of centre and leaning towards anti-capitalism and environmentalism. He has published scholarly critiques of the profession including Global Financial Reporting, with Dr Gabi Ebbers, Palgrave, 2002 and two more radical books published by Routledge: Accounting and Distributive Justice (2010) and The Social Function of Accounts: Reforming accountancy to serve mankind (2017). He has undertaken substantial research on financial reporting and standard setting. He also introduced modern auditing methods for the Common Agricultural Policy and undertook a number of innovative techniques in auditing massive-scale mega audits .
Finally, Rod Sellers OBE , FCA has spent almost 50 years in senior financial and corporate roles in industry. For this project, Rod has given his time, written contributions, and critical feedback unstintingly and without complaint. But he does not want to be regarded as an author – just a contributor. He is deemed part of the auditing establishment (as he sat on the advisory board of one of the Big Four accounting/auditing/consulting firms) and was financial director and then chief executive of a FTSE 250 company. For the last 20 years he has been a portfolio NED/Chairman with a dozen companies – from private family businesses to PIE entities. His role has often included serving on audit committees and working closely with the financial departments. He defends the accounting and auditing profession and, although he appreciates the impact of disruption, he does not believe that very much has gone wrong or generally requires anything more than evolutionary change. However, he appreciates that something more radical might be appropriate in terms of solutions and scenarios to correct problems facing the audit market. He believes that, in most cases, management is basically honest and trustworthy. His motivation to be involved in this series of books is to make sure his viewpoint and that of the profession is taken into account. Rod came to many of the interviews and collected considerable amounts of written evidence (emails etc.).
All three of us have extensive and varied experience in the profession as listed in Table 1.1 . All of us have had preparer, auditing and consulting experience. Two of us have an academic background. One has undertaken the largest of scale audits imaginable. Two of us have had extensive publications. All three of us have experience both from the reporting viewpoint and audit experience. One of us has had a lifetime career in industry with preparer experience including audit committees and shareholders. Two of us are broadly pro-Big Four in some shape or form and one of us is against. But we all agree that the current disputes between the FRC, the users of reports, the Government and the Big Four has to lead to a re-evaluation, not least because of the gap between what the public expects and what the auditors currently deliver. This expectations gap is widening and unstable, especially after the plethora of failures early in 2018.
However, as said earlier, although we share a common view of what the problem is, we do not all share the same opinion of what has caused the problem, or the best way to address it.
• John Flower, despite his extensive audit experience, is negative towards the role of auditors, financial reporting, and current accounting rules. John is disillusioned with the public interest notion of auditing and wants radical change
• Rod Sellers believes that in general the preparers of financial reports do so honestly and fairly. He believes that the available published evidence tends to concentrate on the frauds and scandals, thereby negating much of the good work which is undertaken between a company’s financial team and its auditors out of the public eye. But he recognises that change is coming and may be necessary.
• Krish Bhaskar takes the middle ground and keeps a balanced view. However, he is aware that in a situation like Tesco for example, there is high motivation for senior management to manipulate financial reports, however slightly, to their advantage, for financial gain (salary, bonuses and share options, etc.) or for face-saving aspirations.
There are also many other people who contributed to this book, including practitioners with the Big Four, who prefer to remain anonymous but whose input is significant. Their input amounts to hundreds of hours of partner time, management time, hundreds of pages of input, and thousands of emails. The majority support the profession but some see issues and problems within it. Some are ardent critics of the growing UK approach to audit via checklists rather than by using intuition and a profound in-depth knowledge about the entity being audited.
We also draw on the views of a variety of institutions. These range from support of the current status quo somewhat critical of it, and in some cases highly critical of the status quo and ardently wishing for change.
All of the above demonstrates our key aim: to ensure that this book is relevant fair and transparent. We make it clear whose view it is you are reading – whether it is one of the authors, a Big Four accounting partner, a mid-tier auditor or a practitioner from one of the smaller accounting and auditing practices.