“….lascivious, boozy, flash and tasteless, ignorant of all but money and fast horses and the pleasure of town…… His was ‘an easy come easy go’ existence that had once seemed to be the province only of aristocrats and plutocrats but has now filtered down to the sons of tradesman and attorneys and quacks”. Anyone reading the above might think this had some reference to greedy bankers in the City in the 21st century. In fact, it was written in 1847 by Albert Smith describing the City at that time.
Oh how little things have changed!
The City in the mid 19th century was experiencing a period of explosion in financial services partially caused by the rush to fund the railways, but also by the massive development of financial institutions as the Stock Market, banks and other financial institutions began to finance world trade.
The period was characterised by numerous scandals. “Boards of Directors of fraudulent or just ill run – stock companies or family firms trudged through the dock at the Old Bailey one year after another”.
I do find it amazing that more than 150 years later, and after wave and wave of regulation, legislation and other supposed controls to stem the tide of financial irregularity, we really don’t seem any further forward.
All that seems to have happened is that the instruments used by clever bankers have just become more sophisticated. Ultimately, the general public are paying the price for the greed and abuse of the banking fraternity.
This is of course a worldwide problem, but it does also raise questions about the role of the auditor. Surely the auditor is supposed to provide an independent check on a business. How has it been possible for the banks to suddenly have such massive holes in their balance sheets only months after their audit reports have been signed off with a clean bill of health.
When, if ever, we come out of all this, the time has come for the chummy, old school tie connivance between large corporates and their auditors to be examined very closely without small firms of accountants bearing the brunt of new rules just as they did in similar cases such as Enron, BCCI et al.
Realistically, nothing is likely to change, but a small protest at least makes me feel better.