Of late, the transparency school of this criticism has been focusing on major tax advisory firms that also serve as accounting and audit consulting firms with roots in this part of the world, chiefly from their UK, EU moorings.
They are PricewaterhouseCoopers (PwC), Deloitte and Touche, Ernst and Young as well as KPMG.
The latter is described as “a professional service company and one of the Big Four auditors, along with Deloitte, Ernst & Young, and PricewaterhouseCoopers.
Seated in Amstelveen, the Netherlands, KPMG employs 189,000 people and has three lines of services: financial audit, tax, and advisory.”
The question that comes to mind is how far these firms are lobbyists as some critics make out, or are merely professionals engaged in meeting the audit and accounting criteria of specific clients, both state entities and the private sector. Are audit services lobbying function?
Looking at the description above, the audit firms conduct advisory services for clients, as to what they may profitably or sustainably do in a given situation, and on no account can it be said that they represent those clients before their respective governments.
What appears to be the case is that what they say in terms of company position and objective implications from assessments by any of those major audit firms has a strong impact on policy action, either as actual orientation of policy or in the course of its implementation, as discretion. It matters in routine administration.
In that sense critics are saying the major accounting firms, by their reports that become the formal or technical positions of those they work for, provide a necessary reference point for tax administration, which is objective enough.
The difficulty is when this position taking is seen as a lobby function, in the sense of a schematic presentation inclined to project the interests of big firms they advise (that is, fellow multinationals that operate in the country), and even for that matter major local firms. Radicals see all this as serving tax evasion, capital flight machinations.
There is something in this view that amounts to killing the messenger, as actual policies aren’t designed by audit firms but government economists in the context of a prevailing environment, if it is one of investment attraction or tax enforcement principally.
When the climate of political opinion is hostile to investors as in the first phase, by and large the third phase as well as in the current situation, positions of audit firms are seen as neocolonial and imperialist peddling, wrecking the interests of the country.
When the political atmosphere is favorable to foreign investments as in the second phase and largely during the fourth phase, audit is seen as technical.
In that sense there is no direct bearing of audit and policy, but outlooks on audit services relate to how they impinge on policies, as when radical policies are followed, audit firms serve as a reminder of its implications, and in this context they are seen as lobbyists.
Yet they scarcely conduct or have to conduct any lobbying themselves, as policy lobbying is the mandate of aid agencies firstly, backed by respective home governments as well as international institutions in their specific spheres of responsibility and cooperation with the client state.
Radicals qualify the work of audit firms as lobbying since it has a far-reaching impact, subjectively seen as opinion.