The President of The Institute of Chartered Accountants of Scotland (ICAS) has criticised the increasing burden of litigation and regulation and called for a more balanced framework in business governance.
In his monthly 'Comment' to members which appears in CA Magazine, Ian Robertson points out that the increasing blame culture is stifling business.
The President said:
"In tackling the issue of the emerging “zero tolerance culture” to which I have previously referred, ICAS is looking for the development of a self-supporting framework based on: principle-based standards; effective governance structures; rigorous risk assessments; greater use of "comply or explain"; openness and transparency; encouragement of the exercise of professional judgment; robust auditing; and all underpinned by a public interest focus, professional integrity, and sound ethical principles applied by both auditors and directors.
"Much of this is currently threatened by the increasing blame culture; by increased resort to litigation; by increasing regulatory and governmental intolerance of business or regulatory 'failure'; and by the resultant ever-increasing burden of regulation and prescription on business, large and small.
"Indeed, adding to that last point the comments I have made in recent months about the additional burdens on business such as those arising out of the application of new ethical standards by the APB and the imposition of prescriptive legislation on the OFR, I become ever more concerned at what kind of business development we can expect to see in this country against the background of stifling 'correctness' and inability to accept a sensible balance of risk and reward in the areas of business conduct and governance.
"I strongly believe that a far more balanced "framework" which draws far more of its foundation from ethics, principles and transparency than from prescription, is the right way forward.
1. The Institute of Chartered Accountants of Scotland (ICAS) is the world's first professional body of accountants, receiving its Royal Charter in 1854. ICAS has over 15,500 members worldwide and the CA designation is reserved exclusively for their use in the UK .
2. Under the Royal Charter, the Institute works in the public interest. The objective of ICAS is to uphold the integrity and standing of the profession of chartered accountancy in the interests of society and membership, through excellence in education and the development of accountancy and through service to members and the enforcement of professional standards.
Contact: Martin Robertson
Tel: 0131 347 0306
E-mail : publicrelations@icas.org.uk
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