Profile: ICAEW president William Brooks

In a fiercely competitive corporate world, audit and accounting are critical services ensuring integrity and trust.

But following a spate of recent scandals in which several major professional services firms were implicated, this trust has been compromised.

With the industry’s public reputation damaged, professional bodies have stepped in to help uphold the highest standards within the profession. This is a philosophy that is woven into the fabric of the Institute for Chartered Accountants in England and Wales (ICAEW).

Since 1880, the body has served the industry and the public interest in equal measure, and continues to do so on behalf of its 189,000 members and 12,000 firms to this day.

With an industry-defining period on the horizon, Accountancy Age spoke with newly elected ICAEW president William Brooks, exploring its near and long-term plans for strengthening the organisation and restoring trust in the sector.

Industry changes

In March, the UK government’s department for Business, Energy and Industrial Strategy (BEIS) released a report outlining a major overhaul of audit and corporate governance.

The proposed reforms, which include a new audit regulator and a potential cap on market share across the industry, were referred to as a “once in a generation opportunity” by KPMG’s head of audit Jon Holt.

With the official consultation period on the proposals coming to an end in July, this topic naturally featured heavily when Brooks was questioned on near-term priorities.

“The first and most important priority is trust in the profession,” he said.

“We very strongly support a good part of what’s being recommended. We certainly believe it’s a good thing – no question about that.”

But Brooks is concerned about “unintended consequences”, believing the reforms could potentially bear adverse effects if not thoroughly thought through.

“If you bring in a lot of legislation in a particular area, instead of improving things you may make them worse. It happened in housing, it happened in local government, it happened in a lot of areas. We are trying to prevent the same thing happening in accountancy and audit.

“We are concerned as to whether there’s been a full understanding and thinking through of the consequences of some of the proposals.”

These concerns will feature heavily in the ICAEW’s submission of recommendations to BEIS, Brooks says.

In many ways, this response exemplifies what the ICAEW represents. While one of its core initiatives is to collaborate with government and regulators to improve the industry, it continually shows a reluctance to shy away from expressing concern or criticism.

“Our primary obligation is to the public interest and the royal charter. This isn’t a political game. We are trying to ensure that the quality of legislation and regulation is high.

“Our main concern is that we have a profession which is well regarded, and which public government, interested parties and stakeholders have confidence. And the more we can do in the prosecution of that goal, the better.”

Wider initiatives

Serving as president of the organisation until 2022, Brooks shares some details on the longer term strategy for the ICAEW.

He outlines a broad plan comprised of three pillars: education and training (including the ICAEW academy and corporate training schemes); belonging and supporting (looking after members through faculties, communities and societies); and reputation and influence (professional standards, public policy and communications).

Brooks calls the plan a “10-year task”, arguing that his key objective is to realise the ICAEW’s vision to become a global organisation within the accounting industry.

This largely involves undertaking projects to strengthen other professional accounting bodies around the world, particularly in jurisdictions where the organisations are smaller and less established. This may include setting up better examination and disciplinary schemes and establishing stronger infrastructure.

Such projects undertaken recently include development work in Botswana, where the ICAEW helped to establish the country’s professional body for accounting, and an initiative to strengthen audit in Saudi Arabia.

The institute estimates that around 65 of these international projects have been undertaken in recent years.

“This global leadership work is very important,” says Brooks. “In any country, if there is a strong accounting profession, corruption and bad practice is much more difficult to perpetrate.

“It’s about financial leadership. We are interested in educating, admitting, training, and promoting the careers of financial leaders. We believe that it’s good for society.”

Brooks also expresses his pride for the diversity that currently exists within the ICAEW, and pledges to carry this forward during his tenure.

One of the core building blocks of this, he says, is that the current ICAEW board stands as the first in its history to be majority female.

“That is something of which we are very proud – not because it satisfies any particular pressure group or political party, but because everyone is there on merit. And it just so happens that at the moment, more than half of them are female.

“I think that is indicative of the way things are going. We are seeing a trend of improvement in the range of backgrounds. And the result is that many of our dialogues and the deliberations we hold are tending to be a lot more fertile. In other words, you get better ideas.”

“I am a departure”

Brooks concludes by referring to the value that his background brings, pointing out that he left the accounting practice 35 years ago and now serves as president in his capacity as a business member.

Despite training and working in audit, he also sat on various boards in the banking and securities sector and ran his own corporate finance planning business. This, he argues, will help him deliver considerable value to ICAEW members.

“I probably have a different outlook to many of my predecessors. Most of them have been partners in accounting firms and have a background in public practice. I’m the first in a long time who is not wholly or mainly from that background – I am a departure.”

Central to Brooks’ argument is that he is a “user of audit”, not a provider of it. As someone who selects auditors and scrutinises their practices in aid of his own enterprises, this will, in theory, afford him a new perspective in representing the profession.

“I provide an insight into some of the key issues in this field, which would be different from those which my predecessors would traditionally have offered.”