The men at the helm of the UK’s ‘Big Four’ accountancy firms may be boardroom Titans, but few outside the profession have heard of them. Christian Aid hopes that is all about to change, however, with its latest call to action for its supporters.
The British-based international development agency wants a new accountancy rule introduced that will help stop tax dodging by businesses trading internationally which it estimates costs developing countries at least US$160 billion a year in lost revenue.
It says reform will only happen if there is a ‘change of culture’ in the world of accountancy, and it is looking to the major firms, who between them audit most of the companies in the FTSE 100, to lead the way.
Some 80,000 Christian Aid supporters have now been urged to send pre-written postcards to the heads of the ‘Big Four’ in Britain - John Griffith-Jones (KPMG), John Connolly (Deloitte), Jim S Turley ( Ernst & Young) and Ian Powell (PriceWaterhouse Coopers LLP).
They are being asked to support calls for the International Accountancy Standards Board, which includes former employees of the Big Four, to introduce a new standard that will require multinational corporations to reveal how much profit they make, and how much tax they pay, in every country where they operate.
"You have a key role to play in ensuring that billions of the world’s poorest people benefit from the same essential services as you and your family," the postcards state.
It continues: "As one of the Big Four accountancy firms and a member of the International Accountancy Standards Board, your company could use its influence to help decide how multinationals account for their profits."
"I urge you to support Christian Aid’s call for an international accounting standard on country-by-country reporting so that the multinationals have to declare where they make their profits and how much tax they pay on them," the cards conclude.
Judith Cavanagh, Christian Aid’s economic justice campaign manager, commented: "The new standard would help do away with the practice, currently widespread, of businesses artificially reducing the profits they claim to make in developing countries to reduce their tax liability."
"The practice, called trade mispricing, costs developing countries dearly. We estimate that the US$160 billion lost each year could, if used according to current spending patterns, save the lives of 350,000 children under the age of five every year," she said.
Cavanagh explained: "We decided to approach the Big Four because of their power and influence at the International Accounting Standards Board. Minimising tax whatever the social consequences has in recent years gained a spurious respectability which they could help puncture."
Campaigners can also lobby the Big Four via email, from a page on the Christian Aid website: www.christianaid.org.uk/bigfour