THE BLOG
08/10/2015 07:44 BST | Updated 07/10/2016 06:12 BST

FIFA Corruption: A Yellow Card for Oversight Standards

Here is an amazing football fact: Despite corruption allegations engulfing the sport's governing body nothing ever smelled to its outside auditors.

The disconnect between 16 consecutive annual financial reviews by KPMG, one of the largest accounting firms in the world, showing everything at FIFA spotlessly clean, and the rot of bribery and kickbacks suggested by prosecutors could hardly be more striking.

Whatever the substance behind any of the allegations, they raise the issue of whether accountants can be relied on to be as sceptical as they should when the firms they audit are paying their fees; and in this instance, referring them to other lucrative work.

These are still early days in the task of unravelling the books at FIFA, an organisation with a dizzying revenue of $5.7 billion between 2011 and 2014. And allegations are not convictions. But just as storm-laden clouds can pass overhead, they can just as easily cause a deluge that sweeps all before them.

Nothing is being alleged against KPMG. But the opening of a criminal investigation into FIFA head Sepp Blatter alleging illicit payments, came as KPMG International publicly announced, unusually, an internal review of the role of its Swiss affiliate in auditing world football's governing body.

KPMG might strengthen confidence in this welcome move by offering itself up to independent scrutiny by another accountancy firm. Just an idea.

What is very clear is that as a global 'Big Four' accountancy practice KPMG has as much at stake as FIFA. Unlike banks, accountancy firms are never too big to fail.

Back in the Noughties when there was a 'Big Five', one of them, Arthur Andersen, foundered a year after its client, Enron, collapsed in one of the biggest scandals in US corporate history.

It was a sobering moment to a profession that relies on confidence, is a building block of the global economy, and knows just how difficult its task can be. That is why accountancy is still the only profession that requires by internationally agreed standards 'professional scepticism' from practitioners.

What this means in plain English is making a judgement about whether the finances being presented for sign-off have been accurately and ethically accounted for. The clue is in the first syllable: Account.

It is not the job of auditors to find every fraudulent transaction. But they are required to give an independent opinion on whether financial statements give a true and fair view and are free from material misstatement.

Sometimes what is visible should not be all that a skilled accountant sees. That is the point. The auditor must consider the ethical environment and culture of corporate governance within which the organisation operates.

What can happen over time is that firms and their auditors become too friendly and familiar. KPMG has been auditing FIFA, and getting other unrelated work, since 1999. Interestingly, KPMG has not disclosed the fees it has received for the audit or other special work.

But, in truth, we are still not much wiser as to what has been going on in Zurich. We are probably some years away from being able to lay bare the FIFA scandal, and be clear who is implicated.

For all we really know now Mr Blatter may be more worthy of canonisation than castigation (the odds would be interesting on the former) and the whole furore will blow over.

But it feels as if the storm clouds over FIFA are still gathering, and getting greyer by the day as the large corporate sponsors move to force Mr Blatter's resignation.

In advance of any deluge, we should be asking serious questions now about corporate governance generally, and those on whom the world relies to ensure standards.

Accountancy firms exist as protection as much as for any other reason. Perhaps we need to be worrying about a much bigger question than the fate of FIFA. It is this: Who will guard the guards themselves?