The boring bit is actually not about accountancy, for the simple reason that I don’t think accountancy is boring at all. Weird, I know. Lots of people do, but in my experience, the people who think accountancy is boring, generally speaking, just don’t know stuff.

It is interesting to me that people find accountancy boring. How is that humanly possible? Do they know what accountants do? Every businessperson knows that understanding the accounts is absolutely the most crucial part of the business. It is the business.

And understanding the finances can get very complicated, very fast. My father always used to say you need three sets of books: one to show the investors, one to show the taxman, and one for yourself so you have some idea about what’s going on.

But, there are about a gazillion accountant jokes that stereotype accountants as respectable, upright people with conservative views about financial management, and probably other things, which is of course considered a terrible, terrible thing.

(Actually, there is — at least — one good accountancy joke: what did the overworked asset say to the underworked asset? I feel so under-depreciated.)

The point is that if you look at organisations that have recently toppled over, causing strife, mayhem and wanton human destruction, they are either governments or businesses with dodgy accountants. Hello Tongaat Hulett. And if you look at some organisations that were dodgy, there is a good chance that if their dodginess was exposed, it was exposed by an accountant. Hello Wirecard.

In any event, the accountancy world is being challenged by the decision of EY, one of the Big Four auditors, to split its auditing and consulting services into different businesses, with the consulting business probably ending up being listed.

The sensitivity of this decision goes back to the days when the Big Four were the Big Five and included Arthur Andersen.

Arthur Andersen had the great misfortune to be the auditors of the celebrated energy company Enron, which was for a time one of the most powerful businesses in the US, and had notional revenue five times that of Microsoft and twice that of Goldman Sachs. And then, the company was worth nothing.

Dotcom crisis

What happened, in a sentence, is that the energy firm became at one time a Wall Street darling but the 2001 dotcom crisis had the effect of reducing its profits. So, to protect its share price, it decided to hide these losses in special purpose vehicles, with the connivance of its accountancy firm. Can you imagine the meetings to discuss whether to do this, how to do it, and how to cover it up? Still think accountancy is boring?

Anyway, Arthur Andersen also collapsed as a result, after it was found guilty of obstructing justice for shredding Enron’s financial documents to conceal them from the financial authorities. The conviction was overturned on appeal, but, note to employees: if your financial director tells you to come in over the weekend to start frizzing documents, a) don’t, and b) resign pretty sharpish.

One of the questions subsequent to Arthur Andersen’s demise was whether the advisory side of auditing firms were earning so much money that they were dominating the auditing side of the business. In the Enron case, it was widely suspected that the reason Arthur Andersen had closed its eyes to the pretty obvious financial scam was that the company’s advisers were being paid a fortune  and they kept the auditors in the dark about what was really happening. Oddly, the advisors in this case were not Arthur Andersen because it had split out Andersen Consulting just a year earlier which later became Accenture. Andersen Consulting was not an Enron advisor either.

In any event, a slew of legislation aimed at addressing this issue followed the scandal, and partly as a consequence of the scandal. Several auditing firms, including three of the Big Four, decided to split their advisory business and auditing business into separate companies.

But all four maintained some advisory staff, because it’s just so logical. Who knows your business better than your accountant? No one. Who, consequently, would you most trust to advise you on where to point the company, which businesses to enter, which to exit, and so on? Well, your auditor.

Consequently, the Big Four have gradually built up their advisory capacity, and it’s now once again a material part of their business — and more importantly, it’s faster-growing than their auditing and tax businesses. And there are other issues. EY, for example, audits Amazon and Google, but advisory work is prohibited because of the risk of a conflict of interest and the rules that followed Enron. But they would be tempting clients of the freed-up advisory business.

So far, the other constituents of the Big Four have said very emphatically they will not be following suit. EY itself may not hit the button; the final decision will only take place down the line. But whatever the case, this issue is one to watch. DM/BM

• article corrected to reflect the fact that Arthur Andersen was not in fact Enron’s advisor. Apologies for the error.