Call for debate on future of 'public service' auditing; Outgoing CEO says service helps economy.

Byline: ALISTAIR HOUGHTON

A LEADING Liverpool accountant has called for a debate on whether auditing should be done in the public or private sectors.

David McDonnell, Liverpoolbased chief executive of Grant Thornton International, says auditing is a public service that benefits the whole economy by ensuring businesses are well-run He says that as the profession faces increasing regulation, the Government and accountants need to debate whether auditing should stay in the hands of red tape-bound private firms or should be officially taken on by the state.

Mr McDonnell will stand down from his role at Grant Thornton International at the end of December after eight years at the helm. Previously, he spent 12 years leading Grant Thornton's UK arm.

But, as he explained in an interview for tomorrow's LDP Business magazine, he has kept an office in Liverpool even while his work has taken him to London and around the world.

He is currently High Sheriff of Merseyside, and also President of the Council of the University of Liverpool.

Mr McDonnell told LDP business about the ways the accountancy world has changed in his time leading Grant Thornton Inter national.

He said: "What has happened, and it has been caused by a number of scandals including notably Enron, is that auditing has now been recognised for what it is - as an extremely important service. Not to a client but to the public.

"What has been recognised is that the biggest accounting firms are actually carrying out a very significant public interest activity - they are the main mechanism for giving confidence to the capital markets about organisations.

"Today, auditing is much more recognised as a highly important public interest activity that shouldn't necessarily be subject to the same commercial pressures as other things.

In fact, there's a debate to be had on whether it should be done in the private sector at all."

He added: "The profession itself has its own interests to defend. It can put across a strong argument for the status quo."

Grant Thornton International employs more than 30,000 people and works in more than 100 countries.

* Whole World in His Hands: David McDonnell interview in LDP Business magazine inside the Daily Post tomorrow.

CAPTION(S):

David McDonnell at Grant Thornton's newly-refurbished Royal Liver Building base