EU creeps closer to new accounting rules, UK stops blocking

The UK has been dragging its feet on new EU accounting rules, but now the playing field seems to have changed dramatically over the course of the last week.

So this past week the EU has taken a major step in making it compulsory for firms to switch accountants periodically in order to avoid the kinds of relationships that can muddy the waters when it comes to keeping accurate or trustworthy accounting records. An agreement was reached, which means the new proposals are to be tabled in the European Parliament; amazing that it only took two bloody years.

For what it’s worth, this is a much-needed change that needs to go into effect. I mean let’s look at the facts here: the accounting sector’s biggest names, EY, Deloitte, KPMG and PwC, all said that EU banks were ‘just fine’ right before the 2008 credit crunch that saw a spate of taxpayer bailouts because these banks were deemed ‘too big to fail.’ In many cases, these banks had been using the same accountants for way too many years, so these new rules could go far towards making sure nothing gets bollixed up like that any time soon.

Meanwhile, the UK has been doing its best to block the passage of such a law, yet something changed recently: it capitulated, being swept away in the overwhelming support for the new regulations coming in from the rest of the EU. Well, it looks like the UK has finally seen the writing on the wall as this past week it it considers the regulations as they are written would be ‘legally binding.’ Don’t do us any favours, eh?

Of course, the outpouring of pressure from all quarters might have had some effect on UK lawmakers in their decision to change their tune. Nowhere else in the EU are the interests of bankers so rigorously pursued than right here at home, and it seems that our own Parliament is filled with banking executives instead of MPs with the reluctance Westminster has in actually instituting any curbs on the profligates in the banking industry. Lest we forget that there are still millions and millions paid out in bankers bonuses every year, despite the fact that the UK banking industry nearly collapsed the economy irrevocably back in 2008!

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