The law has long sought to protect the consumer interest by ensuring that those who wish to practise certain professions meet fixed standards. Anyone who uses a solicitor or a dentist does so in the knowledge that they are entitled to practise that profession – and are not breaking the law if they do so.
There is no equivalent standard for accountants. Many people would be surprised to discover that anyone can legally call themselves an accountant, and market their services as such, both to employers and the general public, regardless of what qualifications they hold.
In the accountancy profession, the consumer interest has always been protected by the leading bodies, who defend and promote the virtues of their own qualifications, individually and, on occasion, collectively.
The special difficulties associated with any attempt to reserve the title ‘accountant’ are long-standing. What exactly does an accountant do?
Accountancy is a broad church and many of its qualified members go on to specialise in particular areas, whether it be financial reporting, auditing, tax advice or insolvency. In recent years, the scope of the profession has expanded to cover new specialisms like forensic accounting and internal audit.
The broad scope of the profession is one of its strengths. It ensures that accountants in general practice can offer a wide-ranging and highly valued business advice service. It also means that many financial directors and investment advisers have a solid grounding in the principles of accounting and finance.
But its very diversity does make it more difficult for the general public to distinguish between the different calibre of accountants. And the fact that there are no legal controls makes it easier for some people to take advantage of this confusion.
As long as there remains no legal restriction on who may call themselves an accountant, anyone can. Groups of individuals can form themselves into organisations that purport to award qualifications and a sense of stature and prestige.
Some of these groups are long-standing and serious organisations, while others have a more doubtful credibility.
The risk is that, as regulatory controls over members of CCAB bodies increase, there will be increasing scope for unqualified accountants to undercut their qualified rivals by operating outside the stringent regulatory regimes, now standard in the CCAB context.
The principle that clients should be free to shop around and appoint whomever they choose does not seem fair to the public. At the very least, all those who market themselves as practising accountants should comply with minimum standards regarding training, indemnity insurance and CPD.
The current negotiations on the mutual recognition directive, and the move to create a systematic basis for recognising ‘portable’ qualifications, offers an opportunity to the government to correct what is a long-standing anomaly.
John Davies is head of business law at ACCA
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