Qualified accountants urged to promote credentials for legal recognition

Qualified accountants urged to promote credentials for legal recognition

The Institute of Financial Accounts (IFA) looks at how accountants can do their bit towards legal recognition for the term ‘accountant’ and win themselves some new clients in the process

Qualified accountants urged to promote credentials for legal recognition

Many professional bodies including the IFA have long argued that without formal legal protection on the term ‘accountant’, clients are unwittingly using unqualified agents, putting their business at risk and potentially even committing fraud.

Although government lobbying has called for change and to ensure minimum qualification standards are set, it has shown resistance. The UK government argues that protecting the term makes the sector non-competitive, and such a need is overridden due to the legislative checks in place. However, on the flip side, this leaves the sector and its clients wide open to potential misdemeanour, as any business or individual can call themselves an ‘accountant’.

The fact that the term ‘accountant’ is not protected is relatively common knowledge in the profession yet is not widespread knowledge among existing and potential clientele. The public assumption is it has the same legal protection in the UK as that given to other professions such as doctors, lawyers, and architects.

According to research by the IFA, only 18% of businesses using an accountant are aware that it is not a protected term. The research has highlighted that respondents list “qualified” as the key attribute they expect of their accountant, along with “professionalism” and “trust”, yet less than one in five know that formal training isn’t required for someone to be called an accountant in the first place.

As businesses are grappling with complex and often rapidly changing legislation, this issue has never been more pressing than it is currently. Indeed, HMRC is specifically targeting businesses they suspect of Covid-19 furlough fraud, some of which likely committed fraud inadvertently on the advice of an ‘expert’.

Now more than ever, businesses need a qualified, experienced professional to guide them, but without legal protection for the term ‘accountant’, what assurance is there? That’s why the IFA is encouraging accountants to promote their membership of professional bodies by:

  • Reminding clients: most likely, a client’s decision to use an accountant is based on relationship or price, and few will have asked about qualifications or membership of a professional body. In fact, many may have taken it for granted. When giving them a substantial amount of additional advice and guidance, it is worth accountants reminding them that they are a qualified member of a professional body, and that the client can be sure of both of the quality of their advice as well as their accountability. It might just be the reassurance that they need right now.
  • Telling potential clients: accountants should give prominence to their membership when pitching or quoting for new clients by telling them what their membership means, how it holds them to account, and why it protects them. It will help provide credibility and reassurance.
  • Adding it to marketing assets: as well as designatory letters, accountants should ensure any office stationery, marketing materials, website, proposal templates, presentations, and any external communications include the logo of their professional body, while not forgetting to also display their certificates with pride. It might not be the reason they buy from accountants, but “member of a professional body” was one of the top five reasons survey respondents selected, so it will be a decision validator.
  • Promoting it through local PR: only 18% of survey respondents revealed that they know that there is no regulation for setting up as an accountant, so it is safe to assume that the remaining 82% assume the term is protected. That means they may not know to ask if their existing provider is qualified or a member of a professional body and might just assume that they are. This could be a great local PR angle for accountants or firms, encouraging businesses to check they are getting quality advice. If this were a ‘business as normal’ period, using an unqualified professional is risky enough, but doing it at a time when legislation and guidance is moving at such a pace, businesses could be making ill-informed choices using incorrect or even fraudulent advice, without even knowing it. At best this could mean fines from HMRC; the worst-case scenario is irreparable damage to their reputation and loss of their business.

When choosing which accountant to use, qualifications are often assumed, not validated. Although this varies slightly from body to body, IFA members for example must be qualified, have experience, have all correct insurance and up-to-date regulatory requirements, and subscribe to a code of ethics which guides their behaviour. In turn, practising members are issued with annual practising certificates – which clients can ask to see – and they must also commit to continued professional development throughout the year to keep skills up to scratch and current.

While professional bodies are doing their bit in the fight for recognition, an accountant’s support will be essential too.

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