Government proposals to establish a new professional body for corporate auditors have been dismissed as “a costly distraction” and “career limiting” by the Institute for Chartered Accountants in England and Wales (ICAEW) and the Association for Chartered Certified Accountants (ACCA).
As part of the government’s wider crackdown on audit in the UK, the plans were outlined in a whitepaper published by the Department for Business, Energy and Industrial Strategy (BEIS) earlier this year. A four-month consultation period followed, concluding on July 8.
According to the whitepaper, a new professional body could help to raise the status of corporate auditors and reinforce their public interest obligations.
“The existing recognised qualifying bodies and supervisory bodies already deliver a profession that clearly and distinctly supports auditors, drives high audit quality and is inclusive for wider corporate auditors,” said the ICAEW in its official response to the whitepaper.
“Establishing a separate professional body for corporate audit risks reducing the attractiveness of entering the profession and obtaining a high-quality qualification which is a source of UK global competitive advantage.”
The response also notes that the ICAEW is prepared to develop its qualifications and training infrastructure in line with the government’s reform objectives. This, it argues, would further nullify the creation of a new professional body.
ACCA’s response to the consultation offers further criticism, asserting that, while the idea of expanding audit aligns with its own research findings, funding a new professional body dedicated to audit would “not be in the public interest”.
“It is not in the public interest to publicly fund a specialised professional body, either through the UK government or the new profession when the demand for corporate auditor services has not been tested.
“Whilst there is likely to be a wider demand for accountants and auditors in this space, ACCA does not believe that a new, distinct professional body is required to facilitate this.”
The response goes on to highlight the training, qualification and personal development infrastructure that ACCA already provides, arguing that the duplication of this would be unnecessary.
Perhaps most importantly, the ACCA response condemns the “separation” of corporate audit from accountancy, which it argues would be the consequence of establishing a new professional body for audit.
“We do not consider that the case has been made to separate auditing as a profession from its existing roots in the accountancy profession.”
Among other things, ACCA argued that this new commitment to a separate profession could be “career limiting” and “less attractive to young talent”.
Comments published by the Chartered Institute of Internal Auditors (CIIA) also reject the proposal. It argues that the establishment of a new corporate auditing body could have “unintended consequences” for internal audit by duplicating its remit and responsibilities.
“We do not see it as being necessary or desirable to set up a completely new corporate auditing profession with a new dedicated professional body,” it said.
“If it were deemed there was value in establishing a ‘corporate auditor’ qualification, a far more effective and better mechanism for delivering this would be for the existing relevant professional bodies to provide this.”