If, in 1969, accountants had been asked to predict the evolution of the profession, it is unlikely that the Enron scandal, consolidation down to a Big Four and international accounting standards would have appeared in their crystal ball.
This year, Accountancy Age celebrates its 35th anniversary. Apart from an excuse for a good old knees-up, it’s an opportunity for reflection – a gaze back over more than three decade at the achievements, the crises and the dramas that have unfolded.
For a profession that claims to be one of the oldest in the world, 35 years is a drop in the ocean. And yet the evolution of accountancy over that period has been nothing short of, well, revolutionary. But is it harder to be an accountant in 2004 than in 1969?
Sir Peter Kemp, a former senior Treasury civil servant, is better placed than most to comment, having been qualified for almost 50 years. ‘Thirty-five years ago there certainly weren’t accountants in the public sector – they were bookkeepers,’ he says.
Those working in the profession in the late sixties describe a hard-working, heads-down culture. But the pressures facing staff today have reached new heights, as the pictures of Parmalat’s handcuffed finance chiefs illustrate.
Increasing regulation and the ensuing corporate governance mantra has gradually turned up the heat on those in the financial firing line. The Sarbanes-Oxley Act, recently described as the Y2K of the accounting world, means that being able to prove the accuracy of records and accounts is a matter of survival for companies and freedom for their directors.
And yet accounting scandals are not a new phenomenon – remember the General Electric bid for Associate Electrical Industries debacle or the scandal at the Rolls Razor company? ‘They’ve just got bigger because the companies involved are bigger,’ says Roger White.
White worked at KPMG for 40 years, including 25 as partner, and last year published a history of the firm.
‘When I started life as an accountant and did an audit, no-one was bothered who you were.’And it is only set to increase, he says.
Opinions remain divided as to the impact of corporate accounting scandals.
To some, Sir Peter Kemp included, they’re symptomatic of a fall in standards.
But a more widely held view is that the Enrons of this world are a double-edged sword for the profession – raising the profile of the importance of good financial management and offering many FDs a gold-plated invitation to the top.
Another change is the emphasis on academic achievement. ‘The big firms said if we’re going to attract our fair share of talent, we’re going to have to go after more widely educated people. They started to see the distant view of a profession that was becoming more important,’ says Sir Peter. The industry will continue to attract jobbing accountants, but today it is clear an accountancy qualification is seen as a solid foundation for a career in business.
Eric Anstee, chief executive of the ICAEW, believes the institute’s figures speak volumes about the perception of accounting qualifications in the business community. ‘Of the FTSE100 companies, 90% have at least one of our members on the board. The relevance of the qualification is now much broader than the general public realises. But there are still expectation gaps – in audit for example – and we need to address that.’
The globalisation of business has played its part in attracting a new breed of professional, not to mention the creation of whole new business lines. ‘Big companies didn’t like to have a multiplicity of auditors, so firms expanded. It also was a factor prompting larger firms to move into the sexy arena of management consultancy. It’s a reflection on the way society has moved on in general, driven by advances in technology and increasing globalisation,’ Sir Peter says.
‘Speed of communication and technology have made the job very different,’ agrees Roger White. ‘The grunt work has to a large extent gone, but at the same time the pressures on people are much greater. It also means that, over the last century, people’s aspirations for how they work and where they work has changed dramatically.’
They may be in for a shock if the views of Lord Colin Sharman, former chairman of KPMG International, are anything to go by. ‘To be a successful accountant now is more dependent on detailed knowledge of rules and regulations than the ability to exercise sound professional judgement and as a consequence is less rewarding,’ he says.
For Eric Anstee,an increase in the complexity and pace of the job has gone hand in habd with a shift in expectations on the profession. He jokes that the ICAEW will soon stand for ‘in Europe and the World’.
Loyalty of clients is also a thing of the past, as the focus shifts from forging relationships to getting value for money. ‘Things probably were a bit cosy in the past,’ White says.
But in other respects, not much has changed, in particular the perception of the profession from the outside. ‘In the sixties, accountancy was not seen as a very glamourous job. When accountants went to parties, they were too ashamed to say what they did. I used to tell people I was very interested in management consultancy,’ White admits.
For PricewaterhouseCoopers’ UK chairman Kieran Poynter, accountancy’s image is not about appearing interesting, but showing the world they are trustworthy, particularly given the recent corporate scandals.
‘When Accountancy Age was launched, the profession was based on core values of integrity, independence and technical quality. Those values are as relevant today and we must play our part in upholding them,’ says Poynter.
Gerry Acher, another former senior London partner at KPMG and interim chairman of Camelot, isn’t taking bets on the state of the profession in 35 years’ time. ‘It’s a different world but it’s just as exciting,’ says Acher. ‘Being a good accountant today compared to 1969 is fundamentally the same.’
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process