Ethics and governance in the European Financial centers

Nancy Pelosi, the Democratic Speaker of the House, said a couple of days ago in a TV interview. She denounced "the evasion of taxes of those CEOs of certain hedge funds and other private equity firms who are sheltering their income offshore".

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Former President Bill Clinton's decision to reconsider a business relationship with California billionaire Ron Burkle reflects concern those financial dealings may embarrass his wife's presidential candidacy.

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A guidance paper by the auditor unit of IFAC explores how setting the right tone can positively influence audit quality. The title is Tone at the Top and Audit Quality.

"Leaders of accounting firms have a responsibility to ensure that the commitment to quality is clearly embedded in their organisation’s values, code of conduct, training, and reward policies," David Maxwell, Forum of Firms chairman, said.

IFAC Deputy President Robert Bunting commented on the importance of the tone at the top in finding the right balance between governance, oversight and business growth: “If the CEO’s message is aggressive growth and ‘make the numbers’ first and foremost, then the organization will reflect those priorities. If the CEO emphasizes transparency and integrity, as well as performance, then the organization will respond accordingly.”

The fish rots from the head. If partners a not rigorous and are lax, staff will be lax.

There must be no support for drifts and negligence. But unfortunately, as Francine McKenna explained ,"the firms often have a hard time disciplining their own. They've asked them to join the brotherhood after a long and arduous vetting process. It's hard to admit they made a mistake or let the Peter Principle take hold. Any criticism of any one of them means criticism of the 50-100 partners that sponsored or "gave soundings" (a PwC term) on the guy before electing him to the partnership".

An this is definitely the worst attitude : not facing collectively risks and responsibilities.

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