The Santa Fe’s paradox is the apparent contradiction between the lack of ethical conduct in the business scenario, accounting firms that should be responsible for finding and preventing such fraud fail to do so, and the impact on the survival of the accounting profession.

The basic points of the argument are:

  • There are hundreds of frauds committed each year by officers in private and official entities.
  • For the biggest 12 of those frauds, which occurred over the past 15 years, creditors and shareholders lost more than 200 billion US dollars, approximately the Irish GDP, a country that is situated in place # 48 out of 190 countries
  • The said amount is even bigger if we sum up losses of workers (and families) unemployed, unoccupied buildings, unsatisfied clients and surveyors losses.
  • Those frauds reduce respect for the integrity of the accounting profession because auditors have given clean reports for client’s financial statements. This should never happen, but even the big accounting firm, the «gold standard» of excellence, have been compromised.
  • Therefore, the confidence on such auditing companies is lower every day, not only in economic terms but most important in their credibility as repository of public faith with the continuous occurrence of unbelievable mistakes (e.g. the Oscars award winner envelopes issue).According with this line of reasoning the question is how the accounting profession can survive if those types of frauds or mistakes (name it as you want) continue with no convincing evidence of a reversal attitude from the economic actors.


So, we are facing a conflict between arguments of scale and probability that seem to forecast of frauds and mistakes being common while there is a lack of evidence of any meaningful correction of the present business model.

Those problems exist notwithstanding a tremendous effort performed by IFAC, which is issuing permanent new rules to standardize accounting and auditing procedures.

The accounting profession is the most regulated profession in the world. No other professions have so many detailed regulations as the accounting profession has.

Those regulations can be analyzed in two ways.
“Why do there have to be so many regulations in the accounting profession if their practitioners have university degrees and practice with firms with longstanding experience in their countries?” Other professions rely on the skills and standards of practice of each profession, doctors, lawyers, physicians, philosophers, to give some examples. That could mean that accountants do not enough skills to act on the economic scenario. Since there are so many accountants practicing for the last 150 years, the question then becomes why, with so many existing, are frauds a permanent unresolved problem?

The second way to consider is: “Are chartered accountants following those rules, or they are an essential part of the problem?” Even if such a possibility is rare, the scale indicates that it should exist.

The fact is that this paradox continues shaking the waters of our profession. Because in spite of rules, regulations, and IFAC efforts, the business community only receives “silentium universi” that generates a conundrum of profound scientific, sociological and cultural importance

Alfredo Spilzinger


Graduate of the University of Buenos Aires as doctor in Economic Sciences, Master in Economics and Certified Public Accountant. In the USA Pacific Western University he graduated as Phd in Philosophy and Doctor of Business Administration, with post degrees in modern mathematics, sociology and physics.

In the UK is graduated on financial planning and in Italy on state owned organizations management.

Alfredo Spilzinger is also chairman of the board of Santa Fe Business School, and scientific director at the World Complex Sciences Academy.

Prior to be member of the board of Santa Fe Associates, he was member of the board and Director for Central and South America in Grant Thornton International.

He was also undersecretary of the treasure in Argentina and chairman of the board of a state owned bank.

March 2017