Bloomberg News reports on the scandal-plagued management consulting business: "Now, campaigners are calling for more regulation and transparency."
The article says:
"For the most part, with consulting there are no certifications, no licensing — it's kind of a Wild West mentality," said Tom Rodenhauser, managing partner at Kennedy Research Reports, which tracks consulting firms....
Auditing is regulated in most major markets. In the US, the Big Four cannot provide both auditing and consulting services to the same client, and firms must meet audit standards. But most consultancies aren't listed entities and don't hold banking or money management licenses. Oversight of consulting is largely provided by professional standards organizations, not government agencies.
The idea that "more regulation," "licensing" and oversight by "government agencies" would meaningfully improve the consulting industry strikes me as naive. Plenty of other highly regulated industries, such as banking and pharmaceuticals, are also scandal-prone. Regulation of management consulting would be subject to the same problems that afflict regulation of other industries. The regulators get "captured" by the firms they are regulating. The firms outsmart the regulators. The regulators can't keep up with the firms. The firms spend a lot of money on trying to sway the regulators that might otherwise be spent more productively. There's a lot of compliance theater and compliance-related recordkeeping and systems and training but no great improvement in customer results. Talent then flees the regulated industry for greener, less-regulated pastures.